Problem:
The SEC requires companies to file annual reports concerning their financial status. It is impossible to audit every account receivable. Suppose we audit a random sample of 49 accounts receivable invoices and find a sample average of $128 and a sample standard deviation of $53.
a) Find a 99% confidence interval for the mean size of an accounts receivable invoice. Does your answer require that the sizes of the accounts receivable invoices follow a normal distribution?
b) How large a sample do we need if we want to be 99% sure that we can estimate the mean invoice size within $5?
c) Take new sample size of 100, with sample mean equal to $210 and sample standard deviation of $24. Compute 99.8% confidence interval. Then, how large a sample size do we need to be sure of that 99.8% mean to within 5$?
Compare and contrast the results of a,b) with results of c).
Attachment:- refer1.rar