Question

According to the Air Transport Association of America, the average operating cost of an MD-80 jet airliner is $2,087 per hour. Suppose the operating costs of an MD-80 jet airliner are normally distributed with a standard deviation of $177 per hour.

(Round the value of z to 2 decimal places. Round your answers to 2 decimal places.)

(a) At what operating cost would only 23% of the operating costs be less?

$

(b) At what operating cost would 65% of the operating costs be more?

$

(c) What operating cost would be more than 85% of operating costs?

$

Answer 1

for normal distribution z score =(X-μ)/σx
here mean=       μ=	2087
std deviation   =σ=	177.000

a)

To see the probability 0.23 in the standard normal table the cumulative z value is -0.74

for 20th percentile critical value of z=	-0.74
therefore corresponding value=mean+z*std deviation=	1956.02

b)

for top 65% values are at 35 percentile.

To see the probability 0.35 in the standard normal table the cumulative z value is -0.39.

for 35th percentile critical value of z=	-0.39
therefore corresponding value=mean+z*std deviation=	2017.97

c)

for 85th percentile critical value of z=	1.04
therefore corresponding value=mean+z*std deviation=	2271.08

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