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Company A designs and manufacturers trains and planes and relies on large deals from...

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rodrigoboy | Student, Undergraduate | eNoter

Posted October 27, 2013 at 11:31 PM via web

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Company A designs and manufacturers trains and planes and relies on large deals from its customers for these high-cost products. This series of large contracts makes for a very variable revenue stream compared with the more even income it derives from long-term service contracts. The share of revenue from services dropped from 20% to 14% between 2007 2010 compared with the much higher figure of 48% for Company B in 2010. In 2011, an analyst predicts that Company's A's service share will drop to 13% with a standard deviation of 4% in 2014 and Company B's service share will increase to 50% with a standard deviation of 2%.

The probability that Company A's service share will be lower in 2014 than in 2010.
The probability that Company B's service share will be higher in 2014 and 2010.

I'm not sure if that's the right distribution to solve it either or how to.

Tagged with math, statistics

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