Question

(Round all intermediate calculations to at least 4 decimal places.) An entrepreneur owns some land that...

(Round all intermediate calculations to at least 4 decimal places.)

An entrepreneur owns some land that he wishes to develop. He identifies two development options: build condominiums or build apartment buildings. Accordingly, he reviews public records and derives the following summary measures concerning annual profitability based on a random sample of 32 for each such local business ventures. For the analysis, he uses a historical (population) standard deviation of $22,900 for condominiums and $19,700 for apartment buildings. (You may find it useful to reference the appropriate table: z table or t table)

Sample 1 represents condominiums and Sample 2 represents apartment buildings.

Condominiums Apartment Buildings
x⎯⎯1x¯1 = $249,700 x⎯⎯2x¯2 = $236,400
n1 = 32 n2 = 32

a. Set up the hypotheses to test whether the mean profitability differs between condominiums and apartment buildings.

  • H0: μ1μ2 = 0; HA: μ1μ2 ≠ 0

  • H0: μ1μ2 ≥ 0; HA: μ1μ2 < 0

  • H0: μ1μ2 ≤ 0; HA: μ1μ2 > 0

b. Calculate the value of the test statistic. (Round your answer to 2 decimal places.)

c. Find the p-value.

  • 0.01 p-value < 0.025
  • p-value < 0.01

  • p-value 0.10
  • 0.05 p-value < 0.10
  • 0.025 p-value < 0.05

d-1. At the 5% significance level, what is the conclusion to the test?

d-2. At the 10% significance level, what is the conclusion to the test?

Homework Answers

Answer #1

The statistical software output for this problem is:

On the basis of above output:

a) H0: μ1 − μ2 = 0; HA: μ1 − μ2 ≠ 0

b) Test statistic = 2.49

c) 0.01 < p < 0.025

d - 1) Reject Ho

d - 2) Reject Ho

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
(Round all intermediate calculations to at least 4 decimal places.) An entrepreneur owns some land that...
(Round all intermediate calculations to at least 4 decimal places.) An entrepreneur owns some land that he wishes to develop. He identifies two development options: build condominiums or build apartment buildings. Accordingly, he reviews public records and derives the following summary measures concerning annual profitability based on a random sample of 32 for each such local business ventures. For the analysis, he uses a historical (population) standard deviation of $21,900 for condominiums and $19,900 for apartment buildings. (You may find...
(Round all intermediate calculations to at least 4 decimal places.) An entrepreneur owns some land that...
(Round all intermediate calculations to at least 4 decimal places.) An entrepreneur owns some land that he wishes to develop. He identifies two development options: build condominiums or build apartment buildings. Accordingly, he reviews public records and derives the following summary measures concerning annual profitability based on a random sample of 30 for each such local business venture. For the analysis, he uses a historical (population) standard deviation of $21,900 for condominiums and $20,000 for apartment buildings. Use Table 1....
An entrepreneur owns some land that he wishes to develop. He identifies two development options: build...
An entrepreneur owns some land that he wishes to develop. He identifies two development options: build condominiums or build apartment buildings. Accordingly, he reviews public records and derives the following summary measures concerning annual profitability based on a random sample of 34 for each such local business venture. For the analysis, he uses a historical (population) standard deviation of $21,500 for condominiums and $19,500 for apartment buildings. Use Table 1. Sample 1 represents condominiums and Sample 2 represents apartment buildings....
An entrepreneur owns some land that he wishes to develop. He identifies two development options: build...
An entrepreneur owns some land that he wishes to develop. He identifies two development options: build condominiums or build apartment buildings. Accordingly, he reviews public records and derives the following summary measures concerning annual profitability based on a random sample of 30 for each such local business venture. For the analysis, he uses a historical (population) standard deviation of $23,300 for condominiums and $19,600 for apartment buildings. Use Table 1. Sample 1 represents condominiums and Sample 2 represents apartment buildings....
An entrepreneur owns some land that he wishes to develop. He identifies two development options: build...
An entrepreneur owns some land that he wishes to develop. He identifies two development options: build condominiums or build apartment buildings. Accordingly, he reviews public records and derives the following summary measures concerning annual profitability based on a random sample of 31 for each such local business venture. For the analysis, he uses a historical (population) standard deviation of $22,300 for condominiums and $20,000 for apartment buildings. Use Table 1. Sample 1 represents condominiums and Sample 2 represents apartment buildings....
(Round all intermediate calculations to at least 4 decimal places.) A recent study by Allstate Insurance...
(Round all intermediate calculations to at least 4 decimal places.) A recent study by Allstate Insurance Co. finds that 82% of teenagers have used cell phones while driving (The Wall Street Journal, May 5, 2010). In October 2010, Massachusetts enacted a law that forbids cell phone use by drivers under the age of 18. A policy analyst would like to determine whether the law has decreased the proportion of drivers under the age of 18 who use a cell phone....
(Round all intermediate calculations to at least 4 decimal places.) Consider the following competing hypotheses and...
(Round all intermediate calculations to at least 4 decimal places.) Consider the following competing hypotheses and relevant summary statistics: H0: σ21/σ22σ12/σ22 = 1 HA: σ21/σ22σ12/σ22 ≠ 1 Sample 1: x¯x¯1 = 46.5, s21s12 = 19.1, and n1 = 7 Sample 2: x¯x¯2 = 49.9, s22s22 = 17.2, and n2 = 5 Assume that the two populations are normally distributed. Use Table 4. a-1. Calculate the value of the test statistic. Remember to put the larger value for sample variance in...
(Round all intermediate calculations to at least 4 decimal places.) Consider the following hypotheses: H0: μ...
(Round all intermediate calculations to at least 4 decimal places.) Consider the following hypotheses: H0: μ =208 HA: μ < 208 A sample of 74 observations results in a sample mean of 202. The population standard deviation is known to be 26. Use Table 1 a. What is the critical value for the test with α = 0.10 and with α = 0.01? (Negative values should be indicated by a minus sign. Round your answers to 2 decimal places.) Critical...
The Chartered Financial Analyst (CFA) designation is fast becoming a requirement for serious investment professionals. It...
The Chartered Financial Analyst (CFA) designation is fast becoming a requirement for serious investment professionals. It is an attractive alternative to getting an MBA for students wanting a career in investment. A student of finance is curious to know if a CFA designation is a more lucrative option than an MBA. He collects data on 34 recent CFAs with a mean salary of $140,000 and a standard deviation of $35,000. A sample of 49 MBAs results in a mean salary...
(Round all intermediate calculations to at least 4 decimal places.) Consider the following hypotheses: H0: μ...
(Round all intermediate calculations to at least 4 decimal places.) Consider the following hypotheses: H0: μ ≥ 177 HA: μ < 177 A sample of 84 observations results in a sample mean of 170. The population standard deviation is known to be 24. Use Table 1. a. What is the critical value for the test with α = 0.05 and with α = 0.01? (Negative values should be indicated by a minus sign. Round your answers to 2 decimal places.)...