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Taxation - Statistics Project Example

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Summary
This paper analysis tax on gross profit in the health services industry and telecommunication services industry, 2008 data used in this study was retrieved from Medallia which is a global management solution. In this paper we test the hypothesis that Telecommunication Service industry pay more taxes on gross profit than the healthcare service industry
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Taxation
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Download file to see previous pages e telecommunication industry is an average of 11.77% of gross profit, the tax paid by the health care industry is an average of 8.24% of gross profit.
We test the hypotheis whether the average for telecommunication is greater than that for health care.
Hypothesis:
Null hypothesis:H0: B1 = B2
Alternative hypothesis:Ha: B1>B2
Where B1 is the mean percentage tax paid by the telecommunication industry, B2 is mean percentage tax paid by the health care industry.
We test the hypothesis that the mean are different using T test, we use the following formula to determine the T calcaulted value:
Tcal = (B1 -B2)

[(12/ n1 + 12 /n2)]
Where is the standard deviation and n is the sample size, wee substitute the formula as follows:
Telecommunication Services
Health Care
tax / gross profit
tax / gross profit
total
3.298118756
0.57652713
mean
0.117789956
0.082361019
standard deviation
0.045504328
0.020043758
variance
0.002070644
0.000401752
Tcal = (3.298118756 -0.57652713)

[(0.002070644/ 28 + 0.000401752 /7)]
T calculated is therefore equal to, T cal = 0.011460574
We test this hypothesis at the 95% level of test, a two tail test gives us a critical value of 2.05183, T critical = 2.05183.
Decision:
In hypothesis testing when the T calcualted value is greater than the T critical value we reject the null hypothesis, and if it is less than the T critical value we accpet the null hypothesis, for this reaons therefore our T calcualted value is less than our T critical value and therefore we accet the null hypothesis that B1 = B2, rejecting the alternative hypothesis that B1>B2. for this reaosn therefore we conclude that tax paid on gross profit by the...
On taxes paid health care paid a mean of 1,227.38 in tax while the telecommunication services industry paid a mean of 1,421.34 in taxes, this shows that the telecommunication industry paid a higher tax than health care despite health care recording a higher mean gross profit.
From the above we test the hypothesis that Telecommunication Service industry pay more taxes on gross profit than the healthcare service industry, in order to test this hypothesis we calculate the percentage tax paid on gross profit by both industries, the following table sumarises the results:
In hypothesis testing when the T calcualted value is greater than the T critical value we reject the null hypothesis, and if it is less than the T critical value we accpet the null hypothesis, for this reaons therefore our T calcualted value is less than our T critical value and therefore we accet the null hypothesis that B1 = B2, rejecting the alternative hypothesis that B1>B2. for this reaosn therefore we conclude that tax paid on gross profit by the Telecommunication Service industry is equal to the tax paid on gross proifit by the healthcare service industry.
From the above discussion it si evident that the health care idnustry has a higher mean level of gross profit than the teleommunication idnustry, on tax it is evident that the mean tax paid by the health care industry is lower than the averag ...Download file to see next pagesRead More
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