A Car Dealer Who Sells Only Late-Model Luxury Cars Recently

question 105

Multiple Choice

A car dealer who sells only late-model luxury cars recently hired a new salesperson and believes that this salesperson is selling at lower markups. He knows that the long-run average markup in his lot is $5,600. He takes a random sample of 16 of the new salesperson's sales and finds an average markup of $5,000 and a standard deviation of $800. Assume the markups are normally distributed. What is the value of an appropriate test statistic for the car dealer to use to test his claim?

• A) t₁₅ = -3.00
• B) z = -3.00
• C) t₁₅ = -0.75
• D) z = -0.75

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Definitions:

Gain Or Loss

The financial result that occurs when the selling price of an asset differs from its purchase price, either positive (gain) or negative (loss).

Trade-In Allowance

The amount a seller allows a buyer for a fixed asset that is traded in for a similar asset.

Book Value

The net value of a company's assets and liabilities as recorded on the balance sheet, often compared to market value.

Fixed Asset

Long-term tangible property owned by a business, intended for use in the production of income and not quickly converted into cash.