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A sole trader claims that the average cash sales per transaction is no more than $70. The ATO does not believe

this to be the case. From a sample of 20 cash transactions of the business, the office found that the mean is $75 with a standard deviation of $8.4. With the assumption that the population is approximately normally distributed, and using the 0.1 level of significance, does the ATO have enough proof not to believe the sole trader?

1. Ho: mu (= ; <= ; >=)  ____  70

  Ha: mu (< > ; > ; <) ___ 70

2. Statistical test: (z / t) = ___   test

3. Level of significance (be careful as to one-tailed or two-tailed)  ____

4. Set up critical values (Write the value in the box, include "-" sign if negative, if two values, just write the positive one)  ____

5. Gather sample data: xbar = ____  ; n = 20 ; (sigma or s) ______    = 8.4

6. Calculate test statistic (answer correct to 2 decimal places)  = _____

7. Make statistical conclusion: (Reject / Do not reject) ______   the null hypothesis. There is (sufficient/insufficient)_______    evidence that the sole trader wasn't telling the truth at 10% level of significance.

Top Answer

7) Reject the null hypothesis. There iss... View the full answer

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