In a sample of 41 business trips taken by employees in the HR department, a comp

Question

In a sample of 41 business trips taken by employees in the HR department, a company finds that the average amount spent for the trips was $1,474 with a standard deviation of $480. In a sample of 101 trips taken by the employees in the sales department is $1,700 with a standard deviation of $669. When testing the hypothesis (at the 10% level of significance) that the variance of the amount spent on trips taken by the sales department is higher than those taken by the HR department what is the critical value? (please round your answer to 2 decimal places)

Explanation / Answer

here we are supposed to use F distribution and as we are testing if sales department has higher variance test stat

F=(s1/s2)2 where s1 =variance of sales department; and s2=variance of HR department

; for numerator degree of freedom (n1-1=101-1=100) and denominator degree of freedpm =(n2-1=41-1=40) ; critical value =1.4336

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