A company\'s average accounts receivable per customer is $132.54. After a proble

Question

A company's average accounts receivable per customer is $132.54. After a problem in the automated accounting software is suspected, a random sample of 38 accounts reveals a sample mean of $143.55 and a sample standard deviation of $38.29. In a two-sided hypothesis test to see if the average accounts receivable has changed, what is the best formulation of the null hypothesis? The average accounts receivable is $132.54. The average accounts receivable is $143.55. The average accounts receivable is no longer $132.54. None of the above.

Explanation / Answer

Solution:

The correct answer is OPTION 1

Explanantion:

T test statistic = xbar - u / [s/sqrt(n)

= 143.55 - 132.54 / [ 38.29 / sqrt(38) ]

= 0.1744

Tcritical = 2.026 at 5% on two tailed at 37 df =

Here t test statistic < t critical, we fail to reject H0

The average accounts receivable has not changed.

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