A Corporate Analyst Is Testing Whether Mean Inventory Turnover Has

question 113

Multiple Choice

A corporate analyst is testing whether mean inventory turnover has increased.Inventory turnover in six randomly chosen product distribution centers (PDCs) is shown. The value of the test statistic is:

• A) 3.798
• B) 2.449
• C) 1.225
• D) 3.503

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Definitions:

Cash Flow From Assets

The total of cash flow to bondholders and cash flow to shareholders, consisting of operating cash flow, capital spending, and additions to net working capital.

EBIT

Earnings Before Interest and Taxes, a measure of a company's profitability based purely on operational and business activities without considering interest and tax expenses.

Depreciation

An accounting method used to allocate the cost of a tangible asset over its useful life.

Net Capital Spending

The total expenditure on physical assets less any asset sales, reflecting how much a company is investing in its physical assets.