AJ Davis Department Store Part B AJ Davis Department Store Introduction The following information will show whether or not the manager’s speculations are correct. He wants to know the following information: Is the average mean greater than $45,000? Does the true population proportion of customers who live in an urban area exceed 45%? Is the average number of years lived in the current home less than 8 years? Is the credit balance for suburban customers more than $3200? Hypothesis testing and confidence intervals for situations A-D are calculated. A.THE AVERAGE (MEAN) ANNUAL INCOME WAS LESS THAN $45,000. Solution: Step 1: Null Hypothesis: The average (mean) annual income was equal to $45,000. H_0: ? =45,0000 Step2: Alternate Hypothesis: The average (mean) annual was less than $50,000. H_a: ? 45 , a z-test for the mean will be used to test the given hypothesis. As for the alternative hypothesis, which is Ha:? 0. 45 and the given test is a one-tailed (upper-tailed) z-test. Step 4: Critical Value and Rejection Region: The critical value for significance level is ? =0. 05.
