A Company Has Determined That the Mean Number of Days

question 7

Multiple Choice

A company has determined that the mean number of days it takes to collect on its accounts receivable is 36, with a standard deviation of 11 days. The company plans to select a random sample of n = 12 accounts and compute the sample mean. Which of the following statements holds true in this situation?

• A) The sampling distribution may actually be approximately Normally distributed depending on what the population distribution is.
• B) The sampling distribution will always have the same distribution as the population.
• C) The sampling variability will be greater than if they had sampled n = 64 accounts.
• D) The sampling distribution will certainly be approximately Normally distributed in this case.
• E) The sampling distribution cannot be approximately Normally distributed in this case.

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Definitions:

Profit Maximization

The process by which a company determines the price and output level that generates the maximum profit.

Production Function

A formula that specifies the output of a firm, an industry, or an entire economy for all combinations of inputs.

Cost Per Unit

The cost incurred in the production of one unit of a product, including material, labor, and overhead costs.

Marginal Product

The extra output generated by increasing the use of a variable input by one unit, while keeping all other inputs unchanged.