TABLE 10-15
The table below presents the summary statistics for the starting annual salaries (in thousands of dollars) for individuals entering the public accounting and financial planning professions.
Sample I (public accounting): ₁ = 60.35, S₁ = 3.25, n₁ = 12
Sample II (financial planning): ₂ = 58.20, S₂ = 2.48, n₂ = 14
Test whether the mean starting annual salaries for individuals entering the public accounting professions is higher than that of financial planning assuming that the two population variances are the same.
-Referring to Table 10-15, suppose α = 0.01. Which of the following represents the result of the relevant hypothesis test?
A) The alternative hypothesis is rejected.
B) The null hypothesis is rejected.
C) The null hypothesis is not rejected.
D) Insufficient information exists on which to make a decision.

Question

TABLE 10-15
The table below presents the summary statistics for the starting annual salaries (in thousands of dollars) for individuals entering the public accounting and financial planning professions.
Sample I (public accounting):  ₁ = 60.35, S₁ = 3.25, n₁ = 12
Sample II (financial planning):  ₂ = 58.20, S₂ = 2.48, n₂ = 14
Test whether the mean starting annual salaries for individuals entering the public accounting professions is higher than that of financial planning assuming that the two population variances are the same.
-Referring to Table 10-15, suppose α = 0.01. Which of the following represents the result of the relevant hypothesis test?
A) The alternative hypothesis is rejected. 
B) The null hypothesis is rejected. 
C) The null hypothesis is not rejected. 
D) Insufficient information exists on which to make a decision.

Quizplus · Accepted Answer

We can use a two-sample t-test since the sample sizes are small and the variances are assumed to be equal. The null hypothesis is that the mean starting annual salary for individuals entering public accounting is equal to that of financial planning. The alternative hypothesis is that the mean starting salary for public accounting is higher than financial planning. With a significance level of 0.01 and 24 degrees of freedom, the critical t-value is 2.492. The calculated t-value is 2.527, which falls in the rejection region, but since it is greater than the critical value, we cannot reject the null hypothesis. Therefore, we conclude that there is not enough evidence to support the claim that the mean starting annual salary for individuals entering public accounting is higher than that of financial planning.

TABLE 10-15 The Table Below Presents the Summary Statistics for the Starting