- #1
rhyno89
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Homework Statement
Revenues reported last week from nine shops owned by an international chain averaged $59,540 with a standard deviation of $6,860. Based on these figures in what range might the company expect to find the average revenue of all shops? Include all assumptions
Homework Equations
The Attempt at a Solution
I think i have the answer but it never hurts for a little clarification.
Anyway I started with establishing a sufficient alpha. Since it asks to include all shops and not say 95% of shops I used an alpha value of .01 and since its a two tail test that makes it .005. There are nine shops and therefore 8 df so the t stat is equivalent to t.005,8. From here it was simply xbar +/- t*(s/3)
My only question is if that alpha value will satisfy the "all stores" aspect and whether or not I should first attempt to find an estimate of the standard deviation usingt he choi square distribution and then to plug that into the confidence interval...thanks