Exhibit 9-2. The owner of a large car dealership believes that the financial cri
ID: 3150752 • Letter: E
Question
Exhibit 9-2. The owner of a large car dealership believes that the financial crisis decreased the number of customers visiting her dealership. The dealership has historically had 800 customers per day. The owner takes a sample of 100 days and finds the average number of customers visiting the dealership per day was 750. Assume that the population standard deviation is 350. Refer to Exhibit 9-2. At the 5% significance level, the decision is to ___________. Reject H0; we can conclude that the mean number of customers visiting the dealership is significantly less than 800 Reject H0; we cannot conclude that the mean number of customers visiting the dealership is significantly less than 800 Do not reject H0; we can conclude that the mean number of customers visiting the dealership is significantly less than 800 Do not reject H0; we cannot conclude that the mean number of customers visiting the dealership is significantly less than 800
Explanation / Answer
A)
Formulating the null and alternative hypotheses,
Ho: u >= 800
Ha: u < 800
As we can see, this is a left tailed test.
Thus, getting the critical z, as alpha = 0.05 ,
alpha = 0.05
zcrit = - 1.644853627
Getting the test statistic, as
X = sample mean = 750
uo = hypothesized mean = 800
n = sample size = 100
s = standard deviation = 350
Thus, z = (X - uo) * sqrt(n) / s = -1.428571429
Also, the p value is
p = 0.076563726
As |z| < 1.645, and P > 0.05, we FAIL TO REJECT THE NULL HYPOTHESIS.
Hence,
OPTION D: Do not reject H0; we cannot conclude that the mean number of customers visiting the dealership is significantly less than 800 [ANSWER]
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