A recent survey indicated that the average amount spent for

A recent survey indicated that the average amount spent for breakfast by business managers was $7.58. It was felt that breakfasts on the West Coast were higher than $7.58. A sample of 81 business managers on the West Coast had an average breakfast cost of $7.65. The population standard deviation is $0.42. At = 0.05, what is the critical value?

Solution

Since the sample size is large we use normal table.

The alternate hypothesis is right tailed test

The critical value Z = 1.645.

We obtain the value using excel function normsinv(1-0.05)