Question 1
A group of investors wants to develop a chain of
fastfood restaurants. In determining potential costs for each facility,
they must consider, among other expenses, the average monthly electric
bill. They decide to sample some fastfood restaurants currently
operating to estimate the monthly cost of electricity. They want to be
99% confident of their results and want the error of the interval
estimate to be no more than $100. They estimate that such bills range
from $600 to $2,500. How large of a sample should they take?
Question 2
Where do CFOs get their money news? According to
Robert Half International, 47% get their money news from newspapers, 15%
get it from communication/colleagues, 12% get it from television, 11%
from the internet, 9% from magazines,5% from radio, and 1% do no tknow.
Suppose a researcher wants to test these results.She randomly samples 67
CFOs and finds that 40 of them get their money news from newspapers.
Does the test show enough evidence to reject the findings of Robert Half
International? Use a = .05. Make sure you clearly state both the null
and the alternative hypotheses in full sentences. Following your
calculations, clearly state the conclusion in the same manner (do not
simply say “accept/reject null”) and explain how you arrived at this
conclusion (based on which metrics)
