The Degrees of Freedom for the Appropriate Critical Value with a Hypothesis

question 12

True/False

The degrees of freedom for the appropriate critical value with a hypothesis test comparing two population means with population variances that are unknown but assumed to be equal are determined by n1 + n2 - 1.

Evaluate the value of rough estimates of probability distribution of project NPV or IRR over point estimates.

Understand and apply scenario and decision tree analysis in capital budgeting.

Recognize the significance of options in capital budgeting including expansion, abandonment, and timing options.

Distinguish between different types of analysis including scenario, sensitivity, and simulation analyses in evaluating project variables.

---

Definitions:

Time Series

A time series is a sequence of data points collected or recorded over a specified period, showing the values of a variable or several variables over time.

Forecast

A prediction or estimate of future events, often based on analysis of current and historical data.

Exponential Smoothing

A forecasting technique that applies decreasing weights to past observations, with the most recent observations receiving the most weight.

Smoothing Constant

A parameter used in exponential smoothing models to weigh the significance of the most recent observation in forecasting.