Company A is trying to sell its website to Company B. As part of the sale, Compa

Question

Company A is trying to sell its website to Company B. As part of the sale, Company A claims that the average user of their site stays on the site for 10 minutes. Company B is concerned that the mean time is significantly less than 10 minutes. Company B collects the times (in minutes) below for a sample of 17 users. Assume normality.

Conduct the appropriate hypothesis test for Company B using a 0.03 level of significance.
a) What are the appropriate null and alternative hypotheses?

b) What is the test statistic? Give your answer to four decimal places.

c) What is the critical value for the test? Give your answer to four decimal places.

d) What is the appropriate conclusion?

Explanation / Answer

a) null hypothesis: mean =10

alternate hypothesis: mean <10

b) std error =std deviation/(n)1/2 =0.9245

hence test stat t=(X-mean)/std error =(5.4294-10)/0.9245= -4.9438

c)critical value for test at 16 degree of freedom =2.0240

d) as our t stat falls into critcal region we reject null hypothesis and accept claimn that mean is lesss then 10

X 9.8 3.3 4.5 2.8 14.4 2.6 6.7 8.9 3.9 4.1 2.5 2.8 0.1 1.3 6.3 10.8 7.5 mean 5.4294 std deviation 3.8119

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