Question

The CEO of a company would like to determine whether advertising increases sales. So the null hypothesis tested is H₀: μ_d ≤ 0. The CEO hires you to conduct the analysis for the period 2018 to 2019. Using a Matched sample design yields the following result:

t-Test: Paired Two Sample for Means
	2019	2018
Mean	191.8	172.05
Variance	2030.574359	2878.664103
Observations	40	40
Pearson Correlation	0.821186783
Hypothesized Mean Difference	0
df	39
t Stat	4.077479845
P(T<=t) one-tail	0.000108536
t Critical one-tail	1.684875122
P(T<=t) two-tail	0.000217072
t Critical two-tail	2.02269092

Note: alpha = 0.05.

1. What p-value do you used to make the decision?
2. Based the results, do you reject or not reject the null hypothesis?
3. Based on your answer in part b, what is your conclusion? Be specific by referencing the hypotheses
4. Do you recommend that this company continues to use this advertisement? Briefly justify your answer

Answer 1

From the given information the null and alternative hypothesis is

H0: μd ≤ 0.

H0: μd > 0.

The test is one tailed

a) here we will use p-value =0.0002 to make the decision because test is one tailed

b) since p value is less than 0.05 so we will reject the null hypothesis.

c) we have sufficient evidence to accept the claim that a dvertising increases sales.

d) yes we will recommend that this company continues to use this advertisement because we have proved that advertisement increases sales