A Financial Analyst Would Like to Construct a 95% Confidence

question 42

Short Answer

A financial analyst would like to construct a 95% confidence interval for the mean earnings of a company. The company's earnings have a standard deviation of $12 million. What is the minimum sample size required by the analyst if he wants to restrict the margin of error to $2 million?

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Definitions:

Sustainable Growth Rate

The maximum rate at which a company can grow its sales and earnings without increasing its financial leverage.

Strategic Planning

The process of defining a business's strategy or direction and making decisions on allocating its resources to pursue this strategy.

Strategic Planning

The process of defining a company's direction and making decisions on allocating resources to pursue this direction.

Sustainable Growth Rate

The maximum rate at which a company can grow its revenues and profits without needing to increase its financial leverage.