In Order to Estimate the Mean Salary for a Population

question 45

Essay

In order to estimate the mean salary for a population of 500 employees, the managing director of a certain company selected at random a sample of 40 employees.
a. Would you use the finite population correction factor in calculating the standard error of the sample mean? Explain.
b. If the population standard deviation is $800, compute the standard error both with and without using the finite population correction factor.
c. What is the probability that the sample mean salary of the employees will be within ±$200 of the population mean salary?

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Definitions:

Total Current Assets

Assets of a company that are expected to be used or converted to cash within one year.

Debt/Equity Ratio

Determination of a firm's borrowing dependency, achieved by dividing its liabilities by its shareholder's equity.

Long-Term Debt

Long-term debt refers to loans and financial obligations lasting over one year that a company owes and is recorded on its balance sheet.

Long-Term Debt Ratio

A financial ratio that measures the proportion of a company's total debt that is due more than one year in the future.