Question

The mean collection period for accounts receivable at Ephemeral Products is 16.3 days with a standard deviation of 4.8 days. (a) What is the standardized z-score for an account that is paid in 30 days

Answer 1

2.85

Explanation:

The z score is a score in statistics used to determine by how many standard deviations the raw score is above or below the mean. If the raw score is above the mean then the z score is positive while if the z score is negative then the z score is negative. The z score is given by:

`z=(x-\mu)/(\sigma)\\ \\\mu=mean, \sigma=standard\ deviation, x=raw\ score\\\\Given \ that:\\\\\mu=16.3\ days, \sigma=4.8\ days.\\\\For\ x=30\ days:\\\\z=(30-16.3)/(4.8)\\ \\z=2.85`