An entrepreneur is considering the purchase of a coin-operated laundry. The curr
ID: 3180191 • Letter: A
Question
An entrepreneur 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 population standard deviation (? ) of $150. A sample of 30 days reveals a daily mean revenue of $715 (sample mean; X bar). If you were to test the alternate hypothesis that the daily mean revenue is?not equal to?$675 and assume that the level of significance(? =0.01), please answer the following questions.
State your null and alternate hypotheses :
?
What is the value of test statistic?
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?
What is the rejection criterion based on critical value approach?
?
?
What is the Statistical decision (i.e. reject /or do not reject the null hypothesis)??
?
?
Explanation / Answer
Ans:
Test statistic:
z=(715-675)/(150/sqrt(30))
z=1.46
critical z values=+/-2.58
Rejection region:z<-2.58 or z>2.58
As,z does not fall in rejection region,do not reject the null hypothesis