Question

The following data was calculated during a the study on business reinvestment. Now find the critical value(s) and sketch the rejection region in order to interpret the results for this hypothesis test: An investor would like to test the claim that businesses are reinvesting more than an average of 42 percent of their profits back into their businesses. Significance level = 0.10 Sample size =20 businesses Test statistic t0=2.61 Use the curve below to help visualize your answer.

Select the correct answer below: Fail to reject H0. There is NOT strong evidence to conclude that businesses are reinvesting more than an average of 42 percent of their profits back into their businesses. Fail to reject H0. There is strong evidence to conclude that businesses are reinvesting more than an average of 42 percent of their profits back into their businesses. Reject H0. There is NOT strong evidence to concludethat businesses are reinvesting more than an average of 42 percent of their profits back into their businesses. Reject H0. There is strong evidence to conclude that businesses are reinvesting more than an average of 42 percent of their profits back into their businesses.

Answer 1

Given that 20 Sample Size (n) Population mean (M) 42 Significance Level (2) 0.10 2.61 statistic t = Test Nun hypothesis (He) : M = 42 c claim) Alternative hypothesis (H) u> 42 biven o.10 & - Critical Value 19 degrees of freedom (af) t at 2:0.108 Valle of Therefore, the Gritical df = la is in a right tailed Kect tea 1.328 The Rejection is region R {tit > 1.398 CS Scanned with CamScanner

Test Statistic: The given test statishic value t 2.61 Decision about Ho we have t 2.61 & tc = 1.328 that ta 2.61 > 1,328 ate we observed the null hypothess it is then Concluded that rejected \Но P.Value The P. vake P= P(E>?.61) Pip pa 0.0086 P=0.0086 < 0.10 it is then Concluded dejected. 18 Ho Conclusion: Reject Ho. That is There strong evidence to Conclude that businesses average جاه are se investing more than an 42 percent of their probire their businesses back into CS Scanned with CamScanner

Reject Ho , there is strong evidence to conclude that businesses are reinvesting more than an average of 42 percent of their profits back into their businesses