Question

Employees from Company A and Company B both receive annual bonuses. Test the claim that the difference in annual bonuses is greater than $100 at the 0.05 level of significance? WHAT WOULD THE HYPOTHESES BE FOR THE TEST!!

Answer 1

Answer:

Given,

Null hypothesis is given as follows

Ho : u1 - u2 <= 100

Alternative hypothesis

Ha : u1 - u2 > 100

where as

u1 = Average reward for organization A

u2 = normal reward for organization B

Now let us consider,

Test statistic = ((x1 - x2) - 100) / standard error

where

Standard error = sqrt{(s1^2/n1) + (s2^2/n2)}

while

X1 = mean of the example from the organization A

X2 = mean of the example from the organization B

S1 = sample standard deviation for test 1 (organization A)

S2 = sample standard deviation for test 2 (organisation B)

N1 = Sample size for test 1

N2 = Sample size for test 2

We get the test statistic after the substitution

Presently we have to look in to t table for degrees of opportunity (littler of n1-1, n2-1) and determined test measurements for the p-esteem(value)

In the event that p - esteem is more prominent than 0.05,

At that point , we neglect to dismiss the invalid speculation

For this situation we would not have enough proof to help the case that u1 - u2 > 100

What's more, if p-esteem is under 0.05

We dismiss the null hypothesis

For this situation, we would have enough proof to support the claim

i.e., u1 - u2 > 100