The CFO of a company selling computer software through mega stores claims that average monthly profits throughout country will exceed $1 billion, with a standard deviation of $0.10 billion. A sample survey of software sales in 36 mega stores revealed an average monthly profit of $1.2 billion. You are asked to test the CFO’s claim by examining monthly profits from the sample mega stores using the Z-test.

A) State Ho and H1 for this claim.

B) Is this an upper tailed, lower tailed or two-tailed test? Why?

C) State the decision rule using α = 0.05 significance level? [First find out tabular or critical z value using standard normal distribution table. Then, state the condition under which Ho is rejected).

D) Compute Z- statistic (z-calculated). z = .

E) What is the p-value? [To get the p-value for one-tailed test, first get the probability value in the normal distribution table using the computed Z value or use the web-based calculator at following link: http://www.graphpad.com/quickcalcs/PValue1.cfm].

F) What is your decision regarding Ho? ACCEPT or REJECT? Why?

G) Write your conclusion regarding the CFO’s claim? Was the claim correct or incorrect?

A) State Ho and H1 for this claim.

B) Is this an upper tailed, lower tailed or two-tailed test? Why?

C) State the decision rule using α = 0.05 significance level? [First find out tabular or critical z value using standard normal distribution table. Then, state the condition under which Ho is rejected).

D) Compute Z- statistic (z-calculated). z = .

E) What is the p-value? [To get the p-value for one-tailed test, first get the probability value in the normal distribution table using the computed Z value or use the web-based calculator at following link: http://www.graphpad.com/quickcalcs/PValue1.cfm].

F) What is your decision regarding Ho? ACCEPT or REJECT? Why?

G) Write your conclusion regarding the CFO’s claim? Was the claim correct or incorrect?

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