Construct simulation model-estimate the probability, Basic Statistics

Assignment Help:

CBT has agreed to finance the needs of a stereo wholesaler for the next month. To complete the loan agreement, the wholesaler must estimate the cash on hand during the first 90 days of operation. Daily receipts are normally distributed with a mean of $50,000 and a standard deviation of $12,000. Disbursements are also normally distributed with a mean of $48,000 and a standard deviation of $3,000.

(a)  Construct a computer simulation model to keep track of the cash flow during the first 90 days of operation. Assume that initially that there is $75,000 of cash on hand.

(b)  Repeat the simulation model constructed in part (a) 50 times using a data table. Use the results in the data table to estimate the probability that a short term loan will be needed.

(c)   Suppose that CBT has agreed to finance a short term loan if the probability a loan is needed is between 3% and 7%. How much initial cash on hand should the stereo wholesaler have?

 


Related Discussions:- Construct simulation model-estimate the probability

Confidence interval, 1. Provide an overview of the scenario and the variabl...

1. Provide an overview of the scenario and the variable involved. Include an explanation of why and how constructing the confidence interval adds value. I.e., why might this inform

Capital budget, Capital budget The piece of a budget: a separate budget: d...

Capital budget The piece of a budget: a separate budget: dedicated to proposed additions to capital assets & the means of financing to those additions,

Definition, Definition of statistics according to Prof. Ya lu chan

Definition of statistics according to Prof. Ya lu chan

Esk jewellery, You are working for the management of ESK Jewellery as a mar...

You are working for the management of ESK Jewellery as a marketing consultant. The main business of ESK Jewellery is the retailing of diamond jewellery. They opened their first sho

What is managerial accounting system, Define the Management or Managerial A...

Define the Management or Managerial Accounting System. Ans.  As the name suggest management or managerial accounting system refers to the Management of the firm or company,

Help with homework, 1. Penny Pincher, Inc. had a contribution margin of $33...

1. Penny Pincher, Inc. had a contribution margin of $33,000 on sales of $50,000 and had fixed costs of $18,000. Calculate its break-even point in sales dollars. 2. Krueger Company

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd