So I have this assignment in statistics that states the following:
We need to either accept or throw away a big package of processors. Because of quality control we take take a sample of 200 processors and find 24 that are not working.
The maker of the processors claims that in the entire package there are at most 10 processors that are not working. Do we have enough evidence to throw away his statement with a confidence level of 4%.
I assume this is a Hypothesis Testing question with the formula being equaled to:
z = $\frac{p - po}{\sqrt{\frac{po(1-po)}{n}}}$
I can see that n = 200 however I don't know what is p or what is po
Is p = $\frac{24}{200}$ and po = $\frac{10}{200}$ or is it the other way around?