HARAMAYA UNIVERSITY

COLLEGE OF BUSINESS AND ECONOMICS

DEPARTMENT OF ACCOUNTING AND FINANCE

Business Statistics Assignment II

1. A financial analysis taken a random sample of 81 items, producing a sample mean of 50. The population
standard deviation is 6.
A. Construct a 90% confidence interval to estimate the population mean.
B. Suppose that the standard deviation of the population is not known, but that the standard deviation of
the sample is 6 and a sample size of 25 is taken. Estimate the mean wage rate in the firm using a 95
percent confidence interval.
2. Use the following sample information to calculate the confidence interval to estimate the population
proportion. Let x be the number of items in the sample having the characteristic of interest.
A. n = 116 and x = 57, with 99% confidence
B. n = 800 and x = 479, with 97% confidence
3. A group of investors wants to develop a chain of fast-food restaurants. In determining potential costs for
each facility, they must consider, among other expenses, the average monthly electric bill. They decide to
sample some fast-food restaurants currently operating to estimate the monthly cost of electricity. They want
to be 95 % confident of their results and want the error of the interval estimate to be Br 100. The standard
deviation of annual earnings of the entire population is known to be Br 475. How large a sample should they
take?
4. A survey conducted by “Addis Zemen Gazetta” found that the sample mean age of men was 44 years and
the sample mean age of women was 47 years. Altogether, 454 people from Addis were included in the
readers’ pool – 340 women and 114 men. Assume that the population standard deviation of age for both
men and women is 8 years.
A. Develop a 95% confidence interval estimate for the mean age of men who read the gazetta.
B. Develop a 95% confidence interval estimate for the mean age of the population Compare the widths of
the two interval estimates from part (a) & (b) which one has a better precision? Why?
5. Recently, a study of 87 randomly selected companies with telemarketing operation was completed. The
study revealed that 39% of the sampled companies had used telemarketing to assist them in order

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 processing. Using this information estimate the population proportion of telemarketing companies who use
their telemarketing operation to assist them in order processing taking a 95% confidence level.
6. In a sex discrimination case, an employee alleged that a large corporation paid men more than women for
comparable work. Let population 1 represent all male employees performing certain jobs and population 2
represent all female employees performing comparable jobs at the corporation. Independent samples are
taken of n1  100 males and n2  100 females; the sample means are x1  Br 20,600 and x2  Br19,700 , and
the sample standard deviations are s1  Br3000 and s2  Br 2,500 . Construct a 95% confidence interval for
1   2 . What do you conclude from this?

7. Suppose that a production facility purchases a particular component parts in large lots from a supplier. The
production manager wants to estimate the proportion of defective parts received from this supplier. She
believes that the proportion of defects is no more than 0.2 and wants to be within 0.02 of the true proportion
of defects with a 90% level of confidence. How large a sample should she take?
8. A gasoline service station shows a standard deviation of Br 6 for the changes made by the credit card
customers. Assume that the station’s management would like to estimate the population mean gasoline bill
for its credit card customers to be with in  Br 1.00. For a 90% confidence level, how large a sample would
be necessary?

9. What is the largest sample size that would be needed in estimating a population proportion to within  0.02,
with a confidence coefficient of 0.95?
10. The Master of Business Administration program was experiencing problems scheduling its courses. The
demand for the program’s optional courses and majors was quite variable from one year to the next. In one
year, students seem to prefer marketing courses; in other years, accounting or finance appear to be their best
choice are the rage. In desperation, the Dean of the Business School turned to a statistics professor for
assistance. The statistics professor believed that the problem may be the variability in the academic
background of the students and that the undergraduate degree affects the choice of major. Firstly, he took a
random sample of last year’s MBA students and recorded the undergraduate degree. The undergraduate
degrees were BA, BEng, BBA, and others. There are three possible majors for the MBA students:
accounting, finance, and marketing. The results were summarized in a cross-classification table, which is
shown below.

MBA Major
Undergraduate
Degree Accounting Finance Marketing Total
B.A. 31 13 16 60
B.Eng. 8 16 7 31
B.B.A 12 10 17 39
Others 10 5 7 22
Total 61 44 47 152

Required: Can the statistician conclude that the undergraduate degree affects the choice of major? (Use α =
0.05).
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11. The following data are from a completely randomized design. Referring to the data in the table below
answer the three questions following the table.

Treatment
A B C
32 44 33
30 43 36
30 44 35
26 46 36
32 48 40
A. Compute variance (sum of squares) between sample means
B. Compute variance mean square within samples or treatments.
C. At α =0.05 level of significance, test whether the means for the three treatments are equal.
12. Suppose we are interested in determining whether the standard deviation has changed from the previously
specified level of 15 grams. Thus, we use a two-tail test with the following null and alternative hypotheses:
H0: σ2 = 225
H1: σ2 ≠ 225
If we select a sample of 25 cereal boxes and the sample variance (S 2) is 17.7 grams, you reject the null
hypothesis or accept the null hypothesis?

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