The manager of a department store considers establishing a new billing system for the store’s credit customers. After a thorough analysis, she determines that the new system will be cost effective only if the mean monthly account is more than $170. A sample of 400 monthly accounts is drawn, for which the sample mean is $178. The manager knows that the accounts are approximately normally distributed with a standard deviation of $65. 1) Can the managers conclude that the new system will be cost effective with a 5% significance level? Explain in detail your answer. 2) What is the smallest significance level at which the manager can reject the statement that the new system is not cost-effective? Explain in detail your a
The manager of a department store considers establishing a new billing system for
the store’s credit customers. After a thorough analysis, she determines that the new
system will be cost effective only if the mean monthly account is more than $170.
A sample of 400 monthly accounts is drawn, for which the sample mean is $178. The
manager knows that the accounts are approximately
standard deviation of $65.
1) Can the managers conclude that the new system will be cost effective with a 5%
significance level? Explain in detail your answer.
2) What is the smallest significance level at which the manager can reject the
statement that the new system is not cost-effective? Explain in detail your answer
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