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A lorry manufacturer in Africa claims the average annual maintanance cost for its vehicles is $500.
The maintanance department of one of their customersin Kadoma Industrial estate believes it to be higher and tests this by selecting a random sample of 6 lorries.
The sample gives a mean annual maintanance cost of $555 with a standard deviation of $75.
Use an appropriate hypothesis test at the 5% significance level to see if the manufacturer's claim is true
Ho: u = 500
H1: u > 500
Critical Value: invT(0.95, with df=5) = 2.0150
Test Stat: t(555) = (555-500)/[75/sqrt(6)] = 1.7963
Conclusion: Since the TS is not in the reject interval,
fail to reject Ho.
The test results support the manufacturer's claim at the
5% significance level.