The Chief Financial Officer (CFO) of a company that makes computer accessories s

Question

The Chief Financial Officer (CFO) of a company that makes computer accessories states in a presentation to stakeholders that the variance in monthly sales throughout the company’s history has been $1,400,000. One of the stakeholders questions the CFO’s number, explaining that the variance in sales over the period of the last 30 months has been shown to be $1,420,000. The company accountant is asked by the CFO to calculate the appropriate statistic and to determine whether or not the sample variance mentioned by the stakeholder is statistically significantly different from the overall variance in sales using an alpha of .05. Which of the following options reflects (a) the correct statistic to use and (b) the correct decision with regard to retaining or rejecting the null hypothesis?

Explanation / Answer

solution is (calpha=.05)

this is the solution

because cfo want to calculate the appropriate statistic and to determine ehether or not the sample variance mentioned by the stakeholder is statistically significant from the overall variance in sales using alpha =.05

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