The Next Questions Are Based on the Following Information

question 132

Multiple Choice

The Next Questions Are Based On The Following Information:
The manufacturer of a new chewing gum claims that at least 80% of dentists surveyed prefer their type of gum and recommend it for their patients who chew gum.An independent consumer research firm decides to test their claim.The findings in a sample of 200 dentists indicate that 74.1% of the respondents do actually prefer their gum.
-If conducting a two-sided test of population means,unknown variance,at level of significance 0.05 based on a sample of size 20,the critical t-value is:

• A)1.725
• B)2.093
• C)2.086
• D)1.729

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Definitions:

Debt

An amount of money borrowed by one party from another, under the condition of repayment with interest.

Interest Tax Benefit

The financial advantage gained through deducting interest payments on debt from taxable income.

MM Model

Modigliani-Miller Model; a theory on capital structure that suggests the market value of a firm is determined by its earning power and the risk of its underlying assets.

Tax-Deductibility

Pertains to expenses that can be subtracted from gross income to reduce the total taxable income, thereby lowering the amount of tax owed.