Question

An International company is trying to decide whether to open a new factory in a country that currently does not have any operation. The company will open the new factory if there is evidence that more than 5,000 of the 20,000 potential customers in the area have a favorable view of its products. It conducts a telephone poll of 300 randomly selected potential customers in the area and finds that 96 have a favorable view.

E. The multinational company’s conclusion from conducting the hypothesis test using a 5% level of significance is:

• A.

  to delay opening a new store until additional evidence is collected.

• B.

  to open a new production plant.

• C.

  we cannot tell what the decision should be from the information given.

• D.

  not to open a new production plant.

Answer 1

the null and alternative hypothesis are

Ho: p = 1/4

Ha:p>1/4

using excel>Addin>phstat>one sample test

we have

Z Test of Hypothesis for the Proportion
Data
Null Hypothesis            p =	0.25
Level of Significance	0.05
Number of Items of Interest	96
Sample Size	300
Intermediate Calculations
Sample Proportion	0.32
Standard Error	0.0250
Z Test Statistic	2.8000
Upper-Tail Test
Upper Critical Value	1.6449
p-Value	0.0026
Reject the null hypothesis

since we reject Ho

so option a is true

The multinational company’s conclusion from conducting the hypothesis test using a 5% level of significance is to delay opening a new store until additional evidence is collected.