I have done the work. I just need an expert check and opinion to make sure it is

Question

I have done the work. I just need an expert check and opinion to make sure it is correct.

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.

H0: profit = $1 billion
H1: profit > $1 billion

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

The test is a upper-tailed test because the CEO makes the claim that the profits are going to exceed $1 billion.


C) State the decision rule using a = 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).
Decision Rule: Z (0.05) = 1.645. Reject H0 if Z (observed) > 1.645



D) Compute Z- statistic (z-calculated). z = .
Z (observed) = (1.2-1)/[0.1/sqrt(36)] = 0.2/(0.1/6) = 12


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].

P-value= P (z>12) (approx.) = 0


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

We reject H0 because the p-value = 0 and 12 > 1.645. This is the only condition we need to reject H0.

G) Write your conclusion regarding the CFO’s claim? Was the claim correct or incorrect?
Arrive at a decision: The evidence supports that average monthly profit >$1 billion per month at the 0.05 significance level, The claim was correct and the evidence supports the claim.

Explanation / Answer

Your Analysis is correct.Good Work

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