A Restaurant That Bills Its House Account Monthly Is Concerned

question 96

Multiple Choice

A restaurant that bills its house account monthly is concerned that the average monthly bill exceeds
$200 per account. A random sample of twelve accounts is selected, resulting in a sample mean of
$220 and a standard deviation of $12. The t-test is to be conducted at the 5% level of significance.
The t-value is calculated to be 5.77. At the 0.01 level of significance, what is your decision?

• A) You reject the null hypothesis, and agree that the average monthly bill exceeds $200.
• B) You have insufficient evidence to reject the null hypothesis.
• C) You reject the alternate hypothesis and agree that the average monthly bill is less than $200.
• D) You should have used the z-test.

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