Question

3) The IRS claims that the mean amount of time it takes to transfer information to a computer record is 15 minutes. Before they will invest in a new system they decide to do a test run to determine if the new system is faster than the present one. 25 tax returns are randomly selected and transferred using the new system. The mean time for transfer is 14.3 minutes, with standard deviation 4.2 minutes. At a level of significance of 5% should the IRS invest in the new system?

a) find the critical z-score(s) or t-score(s)

b) compute the test statistic

c) state whether or not to reject the null hypothesis

d) answer the question posed at the end of each problem

Answer 1