Suppose a bank enters a repurchase agreement in which it agrees to buy Treasury securities from a correspondent bank at a price
1 answer:
You might be interested in
Answer:
we recommnend to buy this bracket
Explanation:
The computation is shown below:
Given tyhat
Buying cost of the machine = $33,000 = x
x_1 = $0.67
And, x_2 = $0.41
Now the break even point is
X = x ÷ (x_1 - x_2)
= $33,000 ÷ ($0.67 - $0.41)
= 126,923 units
Therefore
Probability (Demand > Break even point)
= 1 - ($126,923 - 100,000) ÷ 10,000
= 1 - (2.69)
= 0.36%
where
= function of cumulative distribution of N (0,1)
Therefore the probability is that it makes economically the items would be lesser
Thus, we recommnend to buy this bracket