A National Manufacturer of Ball Bearings Is Experimenting with Two

question 77

Multiple Choice

A national manufacturer of ball bearings is experimenting with two different processes for producing precision ball bearings. It is important that the diameters be as close as possible to an industry standard. The output from each process is sampled and the average error from the industry standard is calculated. The results are presented below. The researcher is interested in determining whether there is evidence that the two processes yield different average errors.
Ball Bearings
Hypothesis Test: Independent Groups (t-test, pooled variance)
What is the decision at the 1% level of significance?

• A) Reject the null hypothesis and conclude the means are different.
• B) Reject the null hypothesis and conclude the means are the same.
• C) Fail to reject the null hypothesis and conclude the means are the same.
• D) Fail to reject the null hypothesis and conclude the means are different.

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Definitions:

Ordinary Perpetuity

A series of equal cash flows that occur at the end of each period forever.

Ordinary Annuity

A series of equal payments made at the end of consecutive periods over a fixed length of time.

Compounded Quarterly

When an investment's interest is compounded quarterly, the interest is calculated and added to the principal four times a year.

Perpetuity

A financial instrument that provides a stream of infinite cash flows or payments.