The Next Questions Are Based on the Following Information

question 113

Essay

The Next Questions Are Based On The Following Information:
Research and development has designed a ball point pen so that the true average writing lifetime under controlled conditions (involving the use of a writing machine)is at least 12 hours.A random sample of 18 pens is selected,the writing lifetime of each is determined,and a normal probability plot of the resulting data supports the use of a one-sample t test.
-A company produces electrical devices operated by a thermostatic control.According to the engineering specifications,the standard deviation of the temperature at which these controls actually operate should not exceed 2.0 degrees Fahrenheit.For a random sample of 25 of these controls,the sample standard deviation of operating temperatures was 2.36 degrees Fahrenheit.Stating any assumptions you need to make,test at the 5% level the null hypothesis that the population standard deviation is at most 2.0 against the alternative that is bigger.

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Definitions:

Total Asset Turnover

A financial ratio that measures the efficiency of a company's use of its assets in generating sales revenue; calculated by dividing sales revenue by total assets.

Equity Multiplier

The equity multiplier is a financial ratio that measures a company's leverage by dividing its total assets by its total shareholders' equity, indicating how much of the assets are financed by equity.

Market-To-Book Ratio

A financial valuation metric comparing a company's stock market value to its book value.

Price-Earnings Ratio

A valuation metric that compares a company's share price to its per-share earnings, used to evaluate if a stock is over or under-valued.