An Entrepreneur Is Considering the Purchase of a Coin-Operated Laundry

question 54

Multiple Choice

An entrepreneur is considering the purchase of a coin-operated laundry. The current owner claims that over the past 5 years, the average daily revenue was $675 with a standard deviation of $75. A sample of 30 days reveals a daily average revenue of $625. If you were to test the null hypothesis that the daily average revenue was $675 and decide not to reject the null hypothesis, what can you conclude?

• A) There is not enough evidence to conclude that the daily average revenue was not $675.
• B) There is enough evidence to conclude that the daily average revenue was $675.
• C) There is enough evidence to conclude that the daily average revenue was not $675.
• D) There is not enough evidence to conclude that the daily average revenue was $675.

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Definitions:

Debt-to-equity Ratio

This ratio showcases the relative amounts of debt and shareholders' equity employed to support a company's asset investments.

Times Interest Earned Ratio

A financial ratio measuring a company's ability to meet its interest obligations based on current earnings, indicating financial stability.

Net Profit Margin Percentage

A financial metric that shows the percentage of profit a company makes for every dollar of sales, calculated by dividing net profit by total revenue.

Average Sale Period

A financial metric measuring the average time it takes for a company's inventory to turn into sales, often seen as part of inventory turnover analysis.