Demand for the drug is to use this year production number

Assignment Help Financial Management
Reference no: EM13970836

A drug company believes that the annual demand for a drug will follow a normal random variable with a mean of 900 pounds and a standard deviation of 60 pounds. If the company produces 1000 pounds of the drug, what is the chance (rounded to the nearest hundredth) that it will run out of the drug? Assume that the only way to meet the demand for the drug is to use this year's production number?

Reference no: EM13970836

Questions Cloud

What fraction of all elevator rails will meet specifications : An elevator company produces elevator rails. To meet specifications, an elevator rail must be between 0.995 inches and 1.005 inches in diameter. Suppose that the diameter of an elevator rail follows a normal random variable with mean of 1 inch and st..
Cash flows-suppose the firm uses the npv decision rule : For the given cash flows, suppose the firm uses the NPV decision rule. Year Cash Flow 0 –$ 162,000 1 54,000 2 85,000 3 69,000 Requirement 1: At a required return of 8 percent, what is the NPV of the project Requirement 2: At a required return of 20 p..
Literature on management therioes might enhance performance : In most cases accountants and finance directors do not work in isolation from other parts of the company. Discuss to what extent an understanding of the literature on management therioes might enhance their performance.
What is the projects IRR : A firm evaluates all of its projects by applying the IRR rule. Year Cash Flow 0 –$ 146,000 1 70,000 2 69,000 3 53,000 Requirement 1: What is the project's IRR? Requirement 2: If the required return is 16 percent, should the firm accept the project?
Demand for the drug is to use this year production number : A drug company believes that the annual demand for a drug will follow a normal random variable with a mean of 900 pounds and a standard deviation of 60 pounds. If the company produces 1000 pounds of the drug, what is the chance (rounded to the neares..
What is the amount of the firms net fixed assets : The Burk Company has a ratio of long-term debt to long-term debt plus equity of .34 and a current ratio of 1.6. Current liabilities are $900, sales are $6,320, profit margin is 9.1 percent, and ROE is 19.5 percent. What is the amount of the firm’s ne..
The cost of capital can be defined : The cost of capital can be defined as: A. the weighted average cost of attracting investors to the firm. B. the price of obtaining funding for the firm, weighted according to target ratios in the capital structure. C. less than the weighted average r..
European call option with a strike price : Consider a 9-month European call option with a strike price of $40 on a stock that sells for $35 today. If the annual risk-free rate (continuously compounded) is 8%, the stock pays no dividends, and the stock's annual volatility is 40%, then the Blac..
Required rate of return on the bond : A 10-year bond paying 8% annual coupons pays $1000 at maturity. If the required rate of return on the bond is 7%, then today the bond will sell (rounded to the nearest cent) for?

Reviews

Write a Review

Financial Management Questions & Answers

  Canadian firm is evaluating project-initial investment

A Canadian firm is evaluating a project in the United States. This project involves the establishment of a lumber mill in Wisconsin to process Canadian timber. The factory expects to service clients in the construction industry. All cash flow figures..

  Difference between Levered Banks ROE and its cost of debt

Suppose Levered Bank is funded with 2% equity and 98% debt. Its current market capitalization is $10 billion, and its market to book ratio is 1. Levered Bank earns a 4.22% expected return on its assets (the loans it makes), and pays 4% on its debt. C..

  What annual rate of return does this represent

Against your advice, your little brother bought a Nolan Ryan rookie baseball card nine years ago for $250. Today the same card is selling for $2,700. What annual rate of return does this represent?

  What is the banks asset utilization ratio

A bank has interest income to total assets ratio of 5% and has noninterest income of $30 million and total assets of $750 million. What is the bank's asset utilization ratio?

  Calculating annuity cash flows

If you put up $42,000 today in exchange for a 6.50 percent, 16-year annuity, what will the annual cash flow is? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16))

  Undertaking a major investment

Company Omega is undertaking a major investment. It is expected to cost 1 million in initial investment at t = 0,  1 million at t = 1 and  1 million at t =2. The investment is expected to generate at the end of year t = 2 a dividend flow of 1.0 milli..

  What will portfolios new beta be after these transactions

You have a $2 million portfolio consisting of a $100,000 investment in each of 20 different stocks. The portfolio has a beta of 0.85. You are considering selling $100,000 worth of one stock with a beta of 1.05 and using the proceeds to purchase anoth..

  How much is your payment for the home

You are purchasing a home for $200,000 with a 20% down payment. You will pay 6% interest, for a 15 year loan. How much is your payment for the home (insurance is $60 per month and taxes are $85 per month.) What is your principle, interest and balance..

  Highly effective to qualify for special financial treatment

All hedging relationships must be “highly effective” to qualify for special financial treatment. What is meant by the term highly effective and why is its measurement important for financial managers?

  Disadvantages of earnings management

why is it considered necessary to make adjustments at the end of each accounting period? Explain why the advantages of 'accrual accounting' outweigh the disadvantages of 'earnings management'.

  Limiting the significant growth of a sole proprietorship

Short Answer and Short Problems,  Briefly discuss the most important factors limiting the significant growth of a sole proprietorship or partnership?

  What rate of return should investors expect on fund

Assume that you are the portfolio manager of the SF Fund, a $3 million hedge fund that contains the following stocks. The required rate of return on the market is 11.00% and the risk-free rate is 5.00%. What rate of return should investors expect (an..

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