Bombardier designs and manufactures trains and planes and relies on large deals from its customers for these
Question:
Bombardier designs and manufactures 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 longterm service contracts. Nina Gupta, an analyst, predicts that Bombardier’s service share will drop to 13% with a standard deviation of 1% next year and that Rolls-Royce’s service share will increase to 54% with a standard deviation of 2%. Assuming you believe Nina’s forecast, what is the probability that
a) Bombardier’s service share will be lower than 14% next year?
b) Rolls-Royce’s service share will be higher than 51% next year?
c) State your assumptions clearly and indicate whether you think the assumptions are true.
Step by Step Answer:
Business Statistics
ISBN: 9780133899122
3rd Canadian Edition
Authors: Norean D. Sharpe, Richard D. De Veaux, Paul F. Velleman, David Wright