AMBAI Free Online Distance Course in Management and Business Administration

	American Management and Business Administration Institute 955 Massachusetts Avenue # 3000 - Cambridge, MA 02139-3180 - USA - Fax 1-760-457-3335 Management and Business Administration Online Campus: www.ambai.org email: campus@ambai.org
For Enrolled Students only! For info on AMBAI Certificate Programas click HERE	Study Guide for the Certificate Program in Management and Business Administration.

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Study Guide	This is a Study Guide. As the name implies, it guides the student in the reading of the textbook, The Virtual MBA. The textbook is divided into 12 Chapters and each chapter into several Sections. Sections are numbered consecutively from the beginning to the end of the textbook. We will refer you to the textbook by citing the Section number. This Subject is based on Chapter VIII of the textbook.
Probability and Statistics	The collection and organization of data for a specific purpose is statistics. Probability analysis is the calculation of the chance that something will happen. Now please read Sections 92. and 93. of the textbook and return to this point of the Guide. Please answer the questions
Self- evaluation questions	Question 1 If the observations (shooting scores) are 40 40 45 60 65, which observation value is the median? See Model Answer A1
	Question 2 And which observation value is the mode? See Model Answer A2
Probability Analysis	Probability analysis applied to statistical data allows us to assign a percentage number to the chance of something specific happening. Now please read Section 94. of the textbook and return to this point of the Guide. Please answer the questions
Self- evaluation questions	Question 3 Standard deviation (SD) measures uncertainty. If the SD value of a distribution is high, does that indicate high or low certainty? See Model Answer A3
	Question 4 In a class of 20 students, 1 is age 8, 2 are age 9, 14 are age 10, 2 are age 11, 1 is age 12. Calculate the chances that: 1- The first student selected at random is age 10 2- The the first student selected at random is age 12 See Model Answer A4
The present value of money to be received in the future	Money received today is more valuable than the same amount received in the future.How much more valuable depends on the length of time and the return on this money one could earn from today to the future date of collecting. Establishing the present value of future cash inflows is "discounting" from the nominal amounts the potential earnings of this cash if it would flow in today. Now please read sections 95. and 96. of the textbook and return to this point of the guide. Please answer the questions.
Self- evaluation questions	Question 5 A project to be started today will produce a loss of $500 today and a profit of $1100 one year from now? The current interest rate is 10% a year. What is the net profit at present value? See Model Answer A5
	Question 6 You have to choose between two projects. Project A involves an outlay (investment) today of $ 1000 and one year from now a net income of 2000 (payback of investment + profit). Project B involves an outlay of 1500 now and a net income of 2500 a year from now. Which one would you chose, and why? Use 10% interest for convenience in calculating, but in this case the amount of the rate is immaterial, since it is the same in both cases. See Model Answer A6
Here we say: So long!	This is the End of the Study Guide for the Subject Probability, Statistics and the Time Value of Money. The Subject belongs to the .Curriculum of the Certificate Program in Management and Business Administration offered by AMBAI as a Public Service.
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A2 - 40 (the most frequent one) Back
A1 - 45 Back
A4 - 1- The chance is 14 in 20. In percentage, 14 divided by 20 = 70% 2- The chance is 1 in 20. In percentage, 1 divided by 20 = 5% 1Back
A3 - Low certainty. A high value of SD indicates a wide spread Back
A6 - Project A at present value (10% rate): outlay $1000, income $1818 (aprox. since 1818 plus 10% almost equals $2000). Net positive flow at present value: 818. Project B: outlay $1500, income $2272.= Net positive flow at present value: $772. Conclusion: Project A is preferable from a purely financial point of view. Back
A5 - $500. The loss of $500 is immediate and naturally has a present value of $500. The $1100 profit in a year, at 10% interest, equals a present value of $1000. The net profit is $500 at present value. Back