Question

g Suppose you work for a publishing company and before launching a new magazine targeting fashion-oriented consumers, your boss wants to hold a meeting with perspective advertisers. Assume that annual expenditures on magazine ads in this genre are normally distributed with a mean of $316,532 and a standard deviation of $45,635. If the publisher wants to exclude companies with the smallest 2.74% in terms of annual expenditures on magazine ads from the sales meeting, what is the approximate minimum annual expenditure on magazine ads an advertiser would be required to have so that advertiser would be invited to the meeting

Answer 1

X ≈ 228913 $

Explanation:

The standard score z is:

z = ( X- μ ) /σ (1)

Now z (score ) for 2,74 % is:

2,74 % is 0,0274 and from z table z (score) = - 1,92

By subtitution in equation 1

-1,92 = ( X - 316532 ) / 45635

- 87619,20 + 316532 = X

X ≈ 228913 $