Referring to Scenario 5 and based your calculations, is the agent\'s suspicion c

Question

Referring to Scenario 5 and based your calculations, is the agent's suspicion confirmed? A scrap metal dealer claims that the mean of his cash sales is 'no more than $80 ' However, an IRS agent believes the dealer is being untruthful Assume that the population standard deviation is unknown Observing a random sample of 20 cash customers the IRS agent finds the mean purchase to be $91. with a standard deviation of $21 Assume the population is normally distributed and assume a 0 05 level of significance Assume a t_ value of 1 7291 the hypotheses are as follows H_0: mu 80 (the mean of cash sales is greater than $80) It appears that the agent s suspicion is not confirmed. the mean of the scrap metal dealer s cash sales does not appear to exceed $80. It appears that the agent's suspicion Is confirmed. The mean of the scrap metal dealer's cash sales appears to exceed $80. We cannot determine If the agent's suspicion is confirmed None of the above

Explanation / Answer

here std error =std deviation/(n)1/2 =4.6957

hence test stat t=(X-mean)/std error =(91-80)/4.6957 =2.3425

as t stat is in rejection region

it appears that agent suspicion is confirmed

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