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.

90

170

126

91

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) Using Excel we get,

sample mean = 105.2 thousand dollars

sample standard deviation (s) = 28.8 thousand dollars

b) t-critical value at significance level of 0.10 with degrees of freedom = 9 - 1 = 8 is,

The 90% confidence interval for the population average startup costs μ for candy store franchises is

Where,

Lower limit = 87.3 thousand dollars

Upper limit = 123.1 thousand dollars