Suppose we want to purchase a long-term construction contract. Benzion Barlev of New York University proposed a model for total cost of a long-term contract based on the normal distribution (Journal of Business Finance and Accounting, July 1995). For one particular contract, Barlev assumed total cost, denoted as x, to be normally distributed with the mean $850,000 and standard deviation $170,000. The revenue,R, promised to the contractor is $1,000,000.

1. What is the probability the contract will be profitable?

2.What is the value of the revenueRthat is necessary for the contractor to have a 98% chance of making a profit?