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    CJ's Discount Appliance problem

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    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

    © BrainMass Inc. brainmass.com October 10, 2019, 12:08 am ad1c9bdddf
    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.

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