Question 811546
The average salary of senior managers in the construction industry is $180,000 per year. Suppose we would like to take a sample of senior managers at a newly established company XYZ to see whether the mean annual salary is different from that of the industry. (5 marks) 
This is a two tailed test, because what I want to calculate is whether it is equal to, or not equal to 180,000.
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a. State the null and alternative hypotheses. 
Null: x-bar = 180,000.
Alternative: x-bar # 180,000
 
b. Suppose a sample of 40 senior managers at XYZ showed a sample mean annual salary of $170,000. Assume a population standard deviation of $30,000. With alpha = .05 as the value of significance, what is your conclusion?

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z(170,000) = (170,000-180,000)/[30,000/sqrt(40)] = -2/3
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p-value = 2*P(z < -2/3) = 2*normalcdf(-100,-2/3) = 0.5050
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Conclusion:: Since the p-value is greater than 5%, fail
to reject Ho.
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Cheers,
Stan H.
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