In an article in the Journal of Retailing, Kumar, Kerwin, and Pereira noted factors affecting merger and acquisition activity in retailing. As part of the study, the authors compared the characteristics of "target firms" (firms targeted for acquisition) and "bidder firms" (firms attempting to make acquisitions). Among the variables studied in the comparison were earnings per share, debt-to-equity ratio, growth rate of sales, market share, and extent of diversification.

Let ? be the mean growth rate of sales for all target firms (firms that have been targeted for acquisition in the last five years and that have not bid on other firms), and assume growth rates are approximately normally distributed. Furthermore, suppose a random sample of 25 target firms yields a sample mean sales growth rate of 0.16 with a standard deviation of 0.12. Use critical values and this sample information to test H0: ? = .10 versus Ha: ? >.10 by setting ? equal to .10, .05, .01, and .001. How much evidence is there that the mean growth rate of sales for target firms exceeds .10 (that is, exceeds 10 percent)?

Given data. Mean (7 ): 0.16 SD (S ) = 0.12 Sample (D ) :25 Ho: M = 0.10 ( nun) Ha : M > 0.10 ( Alternative ) tet statististic : 2-y 0. 16 - 0.10 0. 06 2 0 . 12 525 0.024 : t : (2.50 degrey of freedom = 251 = @ 4) Critical valuy : of and dof to 10 = 1. 318 textstatistic fail to reject kto . The null hypothesis was rejected at a=ool we have very strong" evidence that conclude that. (b) Mean (X): 0.12, S : 0.09, 1: 25 and u1: 0.10. tet statistic = 2-4. 0.12 - 0-10 = 0.02 / 0.018 0-09 1 525 .' t : 1. " ( vitical valuy:- o and dof to. 10= 1:318. > teststatistic fail rejecttto." to.05 : 1-711 > test statistic fail to rejecthe . tool : 2492 > tet statistic :fail to reject the to.ool: 3.467. " tet statistic " fail to reject Ho. The null hypothesis way way accept a =0-10 . We have extermely strong " evidence -tepty