Suppose That a Manufacturer Is Testing One of Its Machines $97 \%$

question 20

Multiple Choice

Suppose that a manufacturer is testing one of its machines to make sure that the machine is producing more than $97 \%$ good parts $\left( \mathrm { H } _ { 0 } : p = 0.97 \right.$ and $\left. \mathrm { H } _ { \mathrm { A } } : p > 0.97 \right)$ . The test results in a $P$ -value of $0.122$ . Unknown to the manufacturer, the machine is actually producing $99 \%$ good parts. What probably happens as a result of the testing?

• A) They reject \(\mathrm { H } _ { 0 }\), making a Type I error.
• B) They fail to reject \(\mathrm { H } _ { 0 }\), making a Type II error.
• C) They correctly reject \(\mathrm { H } _ { 0 }\).
• D) They correctly fail to reject \(\mathrm { H } _ { 0 }\).
• E) They fail to reject \(\mathrm { H } _ { 0 }\), making a Type I error.

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Definitions:

Intangible Assets

Non-physical assets that have value, such as intellectual property, trademarks, goodwill, and brand recognition.

Amortization

The gradual reduction or the expensing of an intangible asset's cost over its useful life, similar to depreciation for tangible assets.

Fair Market Value

The price at which an asset would sell in the marketplace between a willing buyer and a willing seller, each having reasonable knowledge of the pertinent facts.

Trade-In Allowance

The amount credited to the buyer of a new item for the value of the old item that is being traded in as part of the transaction.