An Accounting Firm Has Been Hired by a Large Computer

question 45

True/False

An accounting firm has been hired by a large computer company to determine whether the proportion of accounts receivables with errors in one division (Division 1)exceeds that of the second division (Division 2).The managers believe that such a difference may exist because of the lax standards employed by the first division.To conduct the test,the accounting firm has selected random samples of accounts from each division with the following results.
Based on this information,and using a significance level equal to 0.05,the pooled estimator for the overall proportion is = .1050.

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Definitions:

Financial Risk

The chance of incurring financial losses from an investment or business activity.

Operating Leverage

A measure that shows how revenue growth translates into growth in operating income, highlighting the impact of fixed costs.

Financial Performance

An assessment of how well a company can use assets from its primary mode of business and generate revenues.

ROE

Return on Equity; a financial ratio indicating the profitability of a company in relation to its equity capital.