Question 693924: The head accountant at Raglan resources is concerned over the clerical errors on outgoing invoices and suspects that more than 20% of these invoices contain at least one error. In a random sample of 500 invoices, 120 are found to contain at least one error. Do these data support the account’s views? Let alpha=.05
Answer by stanbon(75887)   (Show Source):
You can put this solution on YOUR website! The head accountant at Raglan resources is concerned over the clerical errors on outgoing invoices and suspects that more than 20% of these invoices contain at least one error. In a random sample of 500 invoices, 120 are found to contain at least one error. Do these data support the account’s views? Let alpha=.05
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Ho: p <= 0.20
Ha: p > 0.20 (claim)
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p-hat = 120/500 = 0.24
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z(0.24) = (0.24-0.20)/sqrt[0.20*0.80/500) = 2.2361
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P-value = P(z > 2.2361) = 0.0127
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Conclusion: Since the p-value is less than 5%, reject Ho.
The test results support the claim.
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cheers,
Stan H.
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