Becky Owns a Diner and Is Concerned About Sustaining the Business

question 44

Multiple Choice

Becky owns a diner and is concerned about sustaining the business. She wants to ascertain if the standard deviation of the profits for each week is greater than $250. The details of the profits for the week are (in dollars) 1,743 1,438 1,212 1,705 1,985 1,857 1,916
Assume that profits are normally distributed. Which of the following is the correct value of the test statistic?

• A) 6.146
• B) 8.604
• C) 6.652
• D) 7.375

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Definitions:

Stock Dividend

A stock dividend is a payment made in the form of additional shares instead of cash, reflecting a company's desire to reward shareholders without reducing cash on hand.

Par Value

The face value of a bond or stock as stated by the issuer, which may differ from its market value.

Capital in Excess

Funds received by a company over and above the par value of its stock, also known as additional paid-in capital.

Retained Earnings

Profits that a company has kept or retained rather than paid out as dividends to shareholders, often reinvested in the business.