Question

Do you want to own your own candy store? Wow! With some interest in running your own business and a decent credit rating, you can probably get a bank loan on startup costs for franchises such as Candy Express, The Fudge Company, Karmel Corn, and Rocky Mountain Chocolate Factory. Startup costs (in thousands of dollars) for a random sample of candy stores are given below. Assume that the population of x values has an approximately normal distribution.

92

176

134

100

75

94

116

100

85

(a) Use a calculator with mean and sample standard deviation keys to find the sample mean startup cost x and sample standard deviation s. (Round your answers to one decimal place.)

x =	thousand dollars
s =	thousand dollars

(b) Find a 90% confidence interval for the population average startup costs μ for candy store franchises. (Round your answers to one decimal place.)

lower limit	thousand dollars
upper limit	thousand dollars

Answer 1

a)

= X / n

= 972 / 9

= 108

S = sqrt [ X² - n ² / n-1 ]

= sqrt [ 11253

8 - 9 * 108² / 8 ]  

= 30.7

b)

t critical value at 0.10 level with 8 df = 1.86

95% confidence interval for is

- t * S / sqrt(n) < < + t * S / sqrt(n)

108 - 1.86 * 30.7 / sqrt(9) < < 108 + 1.86 * 30.7 / sqrt(9)

89.0 < < 127.0

Lower limit =89.0

Upper limit = 127.0