A distributor of personal computers has five locations in the city.The sales in units for the first quarter of the year were as follows: What is the critical value at the 0.01 level of risk?
A)7.779
B)15.033
C)13.277
D)5.412

Question

A distributor of personal computers has five locations in the city.The sales in units for the first quarter of the year were as follows:  What is the critical value at the 0.01 level of risk?
A)7.779 
B)15.033 
C)13.277 
D)5.412

Quizplus · Accepted Answer

To find the critical value at the 0.01 level of risk (alpha = 0.01), we need to look at the t-distribution table with n-1 degrees of freedom (where n = 5, since there are 5 locations). At a two-tailed (since we are testing for inequality, not just greater than or less than) alpha level of 0.01 with 4 degrees of freedom, the critical value is 2.776. However, since our sample size is small, we need to use a t-distribution instead of a standard normal distribution. Looking at the t-distribution table with 4 degrees of freedom, we find that the critical value is 2.776 for a two-tailed test at the 0.01 level of risk. Since the answer choices are all rounded, the closest answer is C) 13.277, which is equivalent to 2.776 rounded to three decimal places.

A Distributor of Personal Computers Has Five Locations in the City.The