The manager of a local specialty store is concerned with a possible slowdown in payments by her customers. She thinks that the average number of days receivables are outstanding is increasing. She measures the rate of payment in terms of the average number of days receivables are outstanding. Generally, the store has maintained an average of 50 days. A random sample of 25 accounts gives an average of 54 days outstanding with a standard deviation of 8 days. Conduct a hypothesis test to try to refute that the average number of days receivables are outstanding is increasing. Assume the average number of days receivables are outstanding is normally distributed.
a. Determine your hypotheses. [ Select ] ["H0: μ <50, Ηa: μ >50", "H0: μ >50, Ηa: μ < 50", "H0: μ = 50, Ηa: μ≠50"]
b. Compute the test statistic. [ Select ] ["12.50", "-2.50", "2.50", "-2.00"]
c. What’s the rejection rule? [ Select ] ["Reject H0 if |z|>z α/2", "Reject H0 if |t|>t α/2", "Reject H0 if z< -z α", "Reject H0 if t< -t α"]
d. At the α =.01 level of significance, your Critical Value is [ Select ] ["2.485", "2.787", "2.492", "2.797"]
e. What conclusion can be drawn from this test at a 0.01 significance level? There is enough evidence to reject Ho.