# CJ's Discount Appliance problem

CJ's Discount Appliance Store issues its own credit cards. The credit manager wants to know if the mean monthly, unpaid balance is more than $400. The level of significance is .05. A random check of 200 unpaid balances revealed the sample mean of $420 and the standard deviation of the sample is $40. Should the credit manager conclude the population mean is greater than $400, or is it reasonable that the difference of $20 is due to chance?

1. What test is most appropriate for this problem?

A. Chi-square

B. ANOVA-single factor

C. T-test of paired samples

D. T-test assuming unequal variances

E. Z-test two-sample for means

2. What is the null hypothesis?

A. H0: μ = 400

B. H0: μ ≠ 400

C. H0: μ ≥ 400

D. H0: μ ≤ 400

E. H0: μ1 = μ2

3. What is the test value?

A. -7.07

B. 7.07

C. 1.65

D. -1.65

E. Something else

4. What is your decision?

A. Accept the null of no difference and conclude the balance is not statistically greater than $400.

B. Accept the null of no difference and conclude the balance is statistically less than $400.

C. Reject the null of no difference and conclude the balance is not statistically less than $400.

D. Reject the null of no difference and conclude the balance is statistically greater than $400.

E. Something else

https://brainmass.com/statistics/hypothesis-testing/cjs-discount-appliance-problem-280302

#### Solution Summary

Step by step solutions to all the problems is provided. The expert tests the most appropriate for the problem.