Financial company prepares tax returns for individuals

Assignment Help Finance Basics

Reference no: EM131121750

IRS Audits The Hemingway Financial Company prepares tax returns for individuals. (Motto: "We also write great fiction.") According to the Internal Revenue Service, in- dividuals making $25,000-$50,000 are audited at a rate of 1%. The Hemingway Company prepares five tax returns for individuals in that tax bracket, and three of them are audited.

a. Find the probability that when five people making $25,000-$50,000 are randomly selected, exactly three of them are audited.

b. Find the probability that at least three are audited.

c. Based on the preceding results, what can you conclude about the Hemingway cus- tomers? Are they just unlucky, or are they being targeted for audits?

Reference no: EM131121750

Questions Cloud

What are the risks and the payoffs : What are you trying to do? Articulate your objectives using absolutely no jargon. What is the problem? Why is it hard and How is it done today, and what are the limits of current practice?

Determine the regression equation : A mortgage department of a large bank is studying its recent loans. Of particular interest is how such factors as the value of the home (in thousands of dollars), education level of the head of the household, age of the head of the household, curr..

What is the typical trajectory of technical innovation : What is the relation of technology and innovation to the value equation? What must product and process innovation each accomplish to be successful? What is the typical trajectory of technical innovation? How do technologies succeed one another?- and ..

What heading should the navigator give the pilot : The navigator of an airplane plans a flight from one airport to another 1200 km away, in one direction 30° east of north. The weather office informs him of a prevailing wind from the west, of 80 km/h. The pilot wants to maintain an air speed of 30..

Financial company prepares tax returns for individuals : IRS Audits The Hemingway Financial Company prepares tax returns for individuals. (Motto: "We also write great fiction.") According to the Internal Revenue Service, in- dividuals making $25,000-$50,000 are audited at a rate of 1%. The Hemingway Com..

Domains where reframing can enhance competitiveness : Why is it difficult for incumbent businesses to compete with new market entrants with novel business models? What is reframing beliefs important? - and - What are some ways to accomplish this reframing? What are some of the domains where reframing ca..

The average income of american women : Women's incomes. The average income of American women who work full-time and have only a high school degree is $33,230. You wonder whether the mean income of female graduates from your local high school who work full-time but have only a high scho..

Adaptive organizational design efficient and effective : What competitive advantage do you think Starbucks has? What will they need to do to maintain and sustain the advantage? Is Starbucks “living” its mission? Discuss. Why do you think it is important for Starbucks to keep its mobile workforce “connected..

What samples can be used for diagnosis : Explain how the assays work to diagnose the particular disease, and what samples can be used for diagnosis. Compare and contrast the advantages and disadvantages of each technology.

User Account

All Pages