Hi all
Can anyone help me in calculating & interpreting z value. I need it urgently becaause I am facing problem in cap budgeting topic in questions like find out probability that npv is negative etc.
Thanks.
Aditya (Chartered Accountant) (176 Points)
08 October 2011Hi all
Can anyone help me in calculating & interpreting z value. I need it urgently becaause I am facing problem in cap budgeting topic in questions like find out probability that npv is negative etc.
Thanks.
Suguna
(VP)
(98 Points)
Replied 08 October 2011
step 1. find if the differerence between the value and the mean divided by std deviation is + or -.
if it is + it falls in right tail . if it is - it falls in left tail.
step 2then find the value of z from table for eg if the value in stp 1 say +.2389. go to .23 of of z valu table and see under 8.
to step 2 add 0.5 and multiply by 100 u get %
for - subtract frm .5 valu obtnd frm step 2
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