Question

A medical rehabilitation foundation reports that average cost of rehabilitation for stroke victims is $23,672. A researcher wishes to find out the average costs of rehabilitation by selecting a random sample of 35 stroke victims and finds their average cost to be $24,226. The standard deviation of the population is $3251. At an alpha level of 0.01, can it be concluded that the average cost of stroke rehabilitation at a particular hospital is different from $23,672?

Answer 1

given data are:-

sample size (n) = 35

sample mean () = 24226

population sd () = 3251

hypothesis:-

where, is the true average costs of rehabilitation.

test statistic be:-

p value be:-

[ in any blank cell of excel type =NORM.S.DIST(1.008,TRUE)]

decision:-

p value = 0.3134 > 0.01 (alpha)

so, we fail to reject the null hypothesis.

conclusion:-

there is not sufficient evidence to conclude that  the average cost of stroke rehabilitation at a particular hospital is different from $23,672 at 0.01 level of significance.

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