Question

According to a recent news report, 55% of U.S. companies paid no federal taxes from 2000 to 2004. In a random sample of 350 U.S. companies, 210 paid no federal taxes last year. Test at the 2% level of significance whether the percentage of all U.S. companies who paid no taxes last year is higher than 55%. Use the p-value test.

Answer #1

Here claim is that the percentage of all U.S. companies who paid no taxes last year is higher than 55%.

So hypothesis is vs

Now

Hence test statistics is

P value is

As P value is greater than alpha, we fail to reject the null hypothesis

Hence we do not have sufficient evidence to support the claim that the percentage of all U.S. companies who paid no taxes last year is higher than 55%.

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