MATLAB: An Introduction with Applications
MATLAB: An Introduction with Applications
6th Edition
ISBN: 9781119256830
Author: Amos Gilat
Publisher: John Wiley & Sons Inc
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2b. It is thought that 20% of Annual Tax returns to the Australian Tax Office (ATO) contain 
errors of one kind or another. An auditor in the ATO investigating the number of returns 
with errors in a particular industry takes a sample of 25 returns and classifies each return as 
being “in error” or “not in error”. 
i. If the variable X is used to represent the number of returns in the sample that are in 
error, and assuming this industry is no different to other industries in terms of the error 
rate, then state:
• the values that X may take;
• the distribution of this variable; and 
• the parameter/s of this distribution. 
ii. Determine the probability that 6 or less returns in this sample are in error. 
The auditor found that there were 13 tax returns with errors in this sample. 
iii. Determine the probability of finding 13 or more returns with errors if indeed the error 
rate was 20%. 
iv. Based upon your answer for part iii., what conclusion might the auditor make about this 
particular industry in terms of the error rate of returns. Say in a full sentence exactly 
what led you to this conclusion. 

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