State University Uses Thousands of Fluorescent Light Bulbs Each Year $.05$

question 102

Essay

State University uses thousands of fluorescent light bulbs each year. The brand of bulb it currently uses has a mean life of 600 hours. A competitor claims that its bulbs, which cost the same as the brand the university currently uses, have a mean life of more than 600 hours. The university has decided to purchase the new brand if, when tested, the evidence supports the manufacturer's claim at the $.05$ significance level. Suppose 100 bulbs were tested with the following results: $\bar { x } = 627.5$ hours, $s = 100$ hours. Conduct the test using $\alpha = .05$ .

---

Definitions:

Market Value

The prevailing price for an asset or service that is available for transaction in an open marketplace.

Flotation Costs

The costs associated with issuing new stocks or bonds, including underwriting fees, legal fees, and registration fees.

Pre-Tax Cost

The cost of an investment or loan without taking taxes into account.

Debt-Equity Ratio

A metric reflecting how company assets are proportionally financed by shareholders' equity and debt.