An entrepeneur is considering the purchase of a coin-operated laundry. The curre
ID: 2958543 • Letter: A
Question
An entrepeneur is considering the purchase of a coin-operated laundry. The current owner claims that over the past 5 years, the mean daily revenue was $675 with a standard deviation of $75. A sample of 30 days reveals a daily mean revenue of $625.
Using a .01 level of significance, is there evidence of that the daily mean revenue was $675?
a.) State the null hypothesis
b.) State the alternative hypothesis
c.) What critical values should be used?
d) What is the test statistic?
e.) What is the p-value?
f.) Interpret the meaning of the p-value
g) Should the null hypothesis be rejected?
h) What is the conclusion?
i) state one of the assumptions needed
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Explanation / Answer
Given n=30, xbar=625, s=75
=0.01, the critical value is |Z(0.005)|=2.58 (check normal table)
The test hypothesis is
Ho:=675
Ha: not equal 675
The test statistic is
Z=(xbar - )/(s/n)
=(625-675)/(75/sqrt(30))
=-3.65
Since Z=-3.65<-2.58, we reject Ho. So we can not conclude that there is evidence of that the daily mean revenue was $675.