Question

An audit firm thinks that the average annual salary of a senior level accountant at a construction company exceeds $95,000. A random sample of 28 accountants in similar roles reveals an average salary of $96,000 with a sample standard deviation of $1500. Assume the salaries of the managers are normally distributed. (alpha = 0.10)  

State the Null Hypothesis:

State the Alternate:

State the significance level & one or two tailed:

State the statistic:

State the Decision Rule:

Perform the Calculation – Make the decision.

Interpret the result:

Answer 1

X?= 96000

n= 28

sigma= 1500

Null hypothesis .   

Alternate hypothesis . ......Right tail test ( one tail test )

one tail test

alpha= 0.1

Test Statistics

Z= (X?-u)*sqrt(n)/sigma

=(96000-95000)*sqrt(28)/sqrt(1500)

=3.5276

P-value=1-P(Z<3.5276)=0.00020961

rounded p-value=0.00021

Decision making

P-value <Alpha........... Reject H0

0.00021 <0.1

there is enough evidence to support the claim that the average annual salary of a senior level accountant at a construction company exceeds $95,000

....................

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