Engineering Economics

Below are the quarterly returns on investment (in £000s) of two different investment projects that had the same initial outlay. There is a sample of 16 quarters of returns and your manager has asked you to investigate the relative performance of each project. She suspects that Investment B' outperforms 'Investment A' and she would like you to test this hypothesis. Perform an appropriate statistical test that incorporates your manager's hypothesis.

For question 1, prepare a short report of the results and discuss the following:

Is hypothesis testing important? Explain in detail.

• Explain the process in order to get the results, the key assumptions in this process



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