Assume That a Simple Random Sample Has Been Selected from a Normally

question 118

Essay

Assume that a simple random sample has been selected from a normally distributed population. Find the test statistic, P-value, critical value(s), and state the final conclusion.
-A light-bulb manufacturer advertises that the average life for its light bulbs 900 hours. A random sample of 15 of its light bulbs resulted in the following lives in hours. $$\begin{array} { l l l l l l l l } 995 & 590 & 510 & 539 & 739 & 917 & 571 & 555 \\916 & 728 & 664 & 693 & 708 & 887 & 849 &\end{array}$$ At the 10% significance level, do the data provide evidence that the mean life for the company's light bulbs differs from the advertised mean?

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Definitions:

Capital Budgeting Decision

The process of evaluating and selecting long-term investments that are in line with the firm's goal of value maximization.

Internal Rate of Return

A financial metric used to evaluate the profitability of potential investments, calculated as the discount rate that makes the net present value of all cash flows equal to zero.

Quantitative Decision Rule

A structured approach that uses mathematical models and numerical data to help make decisions.

Time Value of Money

The concept that money available now is worth more than the same amount in the future due to its potential earning capacity.