Wilco is a manufacturer in a mature cyclical industry

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Reference no: EM13850943

Wilco is a manufacturer in a mature cyclical industry. During the most recent industry cycle, its net income averaged $30 million per year with a standard deviation of $10 million (n=6 observations). Management claims that Wilco's performance during the more recent cycle results from new approaches and that we can dismiss probability expectations based on its average or normalized earnings of $24 million per year in prior cycles.

A, With Mu as the population value of mean annual net income, formulate a null and alternative hypotheses consistent with testing Wilco management claim

B. If Wilco's net income follow t distribution what are the degrees of freedom?

C. Identify the rejection point or points at the .5 level of significance for the hypothesis tested in part A.

D. Determine whether or not to reject the null hypothesis at the .5 significance level.

Reference no: EM13850943

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