SCENARIO 12-21 A Filling Machine at a Local Soft Drinks Company Is

question 53

True/False

SCENARIO 12-21
A filling machine at a local soft drinks company is calibrated to fill the cans at a mean amount of 12
fluid ounces and a standard deviation of 0.5 ounces. The company wants to test whether the standard
deviation of the amount filled by the machine is 0.5 ounces. A random sample of 15 cans filled by
the machine reveals a standard deviation of 0.67 ounces.
-Referring to Scenario 12-21, there is sufficient evidence to conclude that the
standard deviation of the amount filled by the machine is not exactly 0.5 ounces when using a
10% level of significance.

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Definitions:

Incremental Cash Flows

The extra cash flow from operations generated by a company when it embarks on a new project.

Net Present Value

The difference between the present value of cash inflows and outflows over a period of time, used in capital budgeting to assess the profitability of an investment.

Incremental Cash Flows

The additional cash flows that a company expects to generate from a particular investment or project.

Terminal Values

The estimated value of a project or investment at the end of its life, often used in discounted cash flow analyses.