A Random Sample of 40 Companies with Assets Over $10

question 17

Multiple Choice

A random sample of 40 companies with assets over $10 million was surveyed and asked to indicate their industry and annual computer technology expense. The ANOVA comparing the average computer technology expense among three industries rejected the null hypothesis. The mean square error (MSE) was 195. The following table summarized the results: Based on the comparison between the mean annual computer technology expense for companies in the tax service and food service industries,the 95% confidence interval shows an interval of −5.85 to 14.85 for the difference. This result indicates that ________.

• A)there is not enough evidence of a significant difference between the two industry technology expenses
• B)the interval contains a difference of 20.7
• C)companies in the food service industry spend significantly more than companies in the tax service industry
• D)companies in the food service industry spend significantly less than companies in the tax service industry

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Definitions:

Marginal Tax Rate

The rate at which the last dollar of a taxpayer's income is taxed, indicating the percentage of tax applied to their highest dollar of income.

Average Tax Rate

The proportion of total income that a taxpayer pays in taxes, calculated by dividing the total taxes paid by the total taxable income.

Taxable Income

The amount of income that is used to calculate how much tax an individual or a company owes to the government.

GAAP

Generally Accepted Accounting Principles, a common set of accounting rules and standards used in financial reporting.