The average annual salary of employees at Wintertime Sports was $28,750 last year. This year the company opened another store. Suppose a random sample of 18 employees had an average annual salary of x = $25,810 with sample standard deviation of s = $4,230. Use a 1% level of significance to test the claim that the average annual salary for all employees is different from last year’s average salary.
State the null and alternate hypotheses. Is the test left-tailed, right-tailed, or two- tailed?
Identify the appropriate sampling distribution: the standard normal or the Student’s t. What is the value of the sample test statistic?
Find or estimate the P-value.
Based on your answers for parts (a) through (c), will you reject or fail to reject the null hypothesis?
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