Lube-Tech Is a Major Chain Whose Primary Business Is Performing

question 126

True/False

Lube-Tech is a major chain whose primary business is performing lube and oil changes for passenger vehicles. The national operations manager has stated in an industry newsletter that the mean number of miles between oil changes for all passenger cars exceeds 4,200 miles. To test this, an industry group has selected a random sample of 100 vehicles that have come into a lube shop and determined the number of miles since the last oil change and lube. The sample mean was 4,278 and the standard deviation was known to be 780 miles. Based on this information, the p-value for the hypothesis test is less than 0.10.

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Definitions:

Net Present Value

The difference between the present value of cash inflows and outflows over a period of time, used to assess the profitability of investments.

Discount Factor(s)

A multiplicative factor used to calculate the present value of future cash flows by accounting for the time value of money.

Discount Rate

The interest rate used in discounted cash flow analysis to calculate the present value of future cash flows.

Net Present Value

The variance between cash inflows' and outflows' current values during a certain period.