A University Wants to Know If the Average Salary of Its

question 58

Essay

A university wants to know if the average salary of its graduates has increased since 2010.The average salary of graduates prior to 2010 was $48,000.Since 2010,the university surveyed 256 graduates and found an average salary of $48,750.Assume that the standard deviation of all graduates' salaries is $7,000.
a.Specify the null and alternative hypotheses to determine whether the average salary of graduates has increased.
b.Calculate the value of the test statistic and the critical value at a 5% significance level.
c.At the 5% significance level,can you conclude that salaries have increased? Explain.

---

Definitions:

Option To Wait

A strategic decision opportunity in investment where the investor can delay an investment decision to gather more information or for conditions to improve.

Soft Capital Rationing

Internal constraints imposed by a company's management on the funds allocated for new investments, often due to budgetary constraints.

Financial Markets

Financial markets are platforms where individuals and entities can trade financial securities, commodities, and other fungible items of value at low transaction costs and at prices reflective of supply and demand.

NPV Projects

Projects that are evaluated based on the Net Present Value method, helping in deciding whether they contribute positively to the company's value.