The Manager of a Local Specialty Store Is Concerned with a Possible

question 34

Multiple Choice

The manager of a local specialty store is concerned with a possible slowdown in payments by her customers. She measures the rate of payment in terms of the average number of days receivables are outstanding. Generally, the store has maintained an average of 50 days with a standard deviation of 10 days. A random sample of 25 accounts gives an average of 54 days outstanding with a standard deviation of 8 days. Assume the number of days is approximately normally distributed.
-The null and alternative hypotheses needed to show that there has been a slowdown in payments by the company's customers is _____.

• A)H₀: ? = 50 vs.H_a: ? ? 50
• B)H₀: ? ? 54 vs.H_a: ? < 54
• C)H₀: ? ? 50 vs.H_a: ? < 50
• D)H₀: ? ? 50 vs.H_a: ? = 50
• E)H₀: ? ? 50 vs.H_a: ? > 50

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Definitions:

Operating Activities

Activities related to the day-to-day functions of a business that involve generating revenue, paying expenses, and the net cash flow from these operations.

Depreciation

The process of allocating the cost of a tangible asset over its useful life, reflecting the loss of value over time.

Amortization

The process of spreading out a loan into a series of fixed payments over time, or the gradual reduction of the book value of an intangible asset over its useful life.

Cash Flows

The total amount of money being transferred into and out of a business, affecting the company's liquidity.