10 PROBLEM4 In order to shrink its labor force, a large company (such as IBM) is

Question

10 PROBLEM4 In order to shrink its labor force, a large company (such as IBM) is considering offering an early retirement package to its employees who are over fifty-five and who have been on the payroll at least ten years. However, this plan will not be cost-effective if more than 25% of such employees choose to accept this package. A random sample of 100 eligible employees indicates that 30 of them would accept the early retirement package, if it were offered. Using a 1% lev significance, test the null hypothesis that the fraction of all eligible employers who would accept the package is no greater than 0.25, against the alternative that it is greater l of MC Q#17. Which are the appropriate null and alternative hypotheses? a. Ho p20.25 HA:p0.25

Explanation / Answer

17) Option - c

18) Option - b

z = (0.3- 0.25)/sqrt(0.25 * 0.75/100)

= 1.15

19) Option - b

At 1% significance level the critical value is z0.99 = 2.33

20) As the test statistic value is not greater than the critical value (2.33 > 1.15), so the null hypothesis is not rejected.

Option-a) Accept H0

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