A Car Company Is Interested in Testing to See Whether

question 2

Multiple Choice

A car company is interested in testing to see whether the mean miles that a car engine will last without changing oil is the same or different depending on which brand of oil is used. The engineers also wish to control for the type of transmission (manual or automatic) that is used. To conduct this test, the car company obtains enough engines so that all four oil brands can be tested in a design that involves no replication. The following data reflect the miles the engine lasted until problems were encountered. Data are in thousands of miles. Assuming that the hypothesis tests are conducted using a significance level equal to 0.05, which of the following statements is true?

• A) Based on the data, Oil 1 and Oil 3 give statistically more miles on average than do the other two oils.
• B) The type of transmission does seem to have an impact on the mean miles that an engine will last.
• C) The F-critical value for testing whether blocking is effective is 10.128.
• D) All of the above are true.

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Definitions:

Investing Activities

Transactions and events that involve the purchase or sale of long-term assets and investments, a component of a company’s cash flow statement.

Financing Activities

Actions that result in changes in the size and composition of the equity capital or borrowings of a company.

Basic Financial Statements

Core reports that provide critical financial information about a company, typically including the balance sheet, income statement, and statement of cash flows.

Investing Activities

Transactions involving the purchase and sale of long-term assets and other investments, not including cash equivalents.