An accountant wants to know if the property taxes paid by clients who live in the city are different from those who live in the country. The property taxes paid by five clients from the city (sample 1) and five clients from the country (sample 2) are shown below. Using the critical value approach and α = 0.05, the appropriate conclusion is ________.
A) reject the null hypothesis; we cannot conclude the median taxes paid in the city differs from the median taxes paid in the country
B) do not reject the null hypothesis; conclude the median taxes paid in the city differs from the median taxes paid in the country
C) reject the null hypothesis; we can conclude the median taxes paid in the city differs from the median taxes paid in the country
D) do not reject the null hypothesis; we cannot conclude the median taxes paid in the city differs from the median taxes paid in the country

Question

An accountant wants to know if the property taxes paid by clients who live in the city are different from those who live in the country. The property taxes paid by five clients from the city (sample 1) and five clients from the country (sample 2) are shown below.  Using the critical value approach and α = 0.05, the appropriate conclusion is ________.
A) reject the null hypothesis; we cannot conclude the median taxes paid in the city differs from the median taxes paid in the country 
B) do not reject the null hypothesis; conclude the median taxes paid in the city differs from the median taxes paid in the country 
C) reject the null hypothesis; we can conclude the median taxes paid in the city differs from the median taxes paid in the country 
D) do not reject the null hypothesis; we cannot conclude the median taxes paid in the city differs from the median taxes paid in the country

Quizplus · Accepted Answer

Using the critical value approach and α = 0.05, the calculated test statistic is -0.48 and the critical value is 2.306. Since -0.48 is not less than -2.306 or greater than 2.306, we fail to reject the null hypothesis. Therefore, we cannot conclude that the median taxes paid in the city differs from the median taxes paid in the country.

An Accountant Wants to Know If the Property Taxes Paid