SCENARIO 12-14 A Perfume Manufacturer Is Trying to Choose Between 2 Magazine

question 130

Multiple Choice

SCENARIO 12-14
A perfume manufacturer is trying to choose between 2 magazine advertising layouts.An expensive layout would include a small package of the perfume.A cheaper layout would include a "scratch- and-sniff" sample of the product.The manufacturer would use the more expensive layout only if there is evidence that it would lead to a higher approval rate.The manufacturer presents the more expensive layout to 4 groups and determines the approval rating for each group.He presents the "scratch-and-sniff" layout to 5 groups and again determines the approval rating of the perfume for each group.The data are given below.Use this to test the appropriate hypotheses with the Wilcoxon Rank Sum Test with a level of significance of 0.05.

12-34 Chi-Square and Nonparametric Tests
-Referring to Scenario 12-14,the perfume manufacturer will

• A)use the "scratch-and-sniff" layout because there is insufficient evidence to do otherwise.
• B)use the package layout because there is insufficient evidence to do otherwise.
• C)use the "scratch-and-sniff" layout because there is sufficient evidence to conclude that this is the best course of action.
• D)use the package layout because there is sufficient evidence to conclude that this is the best course of action.

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Definitions:

Debt to Assets Ratio

A financial ratio that indicates the percentage of a company's assets that are provided via debt.

Current Liabilities

Liabilities due within a short period, typically less than a year, that are supposed to be paid out of current assets.

Debt to Equity Ratio

A financial ratio indicating the relative proportion of shareholders' equity and debt used to finance a company’s assets.

Total Liabilities

This term represents the aggregate of all debts and financial obligations owed by an entity to outside parties at any given point in time.