Question

An entrepreneur is considering the purchase of a coin-operated laundry. The current owner claims that over...

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(μ) was $725 with a population standard deviation (σ ) of $125. A sample of 30 days (n) reveals a daily mean revenue of $750 (sample mean; X bar). If you were to test the alternate hypothesis that the daily mean revenue is not equal to $725 and assume that the level of significance(α =0.1), please answer the following questions (20 points)

  1. State your null and alternate hypotheses :
  1. What is the value of test statistic? Please show all the relevant calculations.

                                                                                                                                                     

  1. What are the rejection criteria based on critical value approach?
  1. What is the Statistical decision (i.e. reject /or do not reject the null   

hypothesis)? Provide justification for your decision.

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