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# 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

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 venture. For the analysis, he uses a historical (population) standard deviation of \$22,800 for condominiums and \$19,800 for apartment buildings. Use Table 1.

Sample 1 represents condominiums and Sample 2 represents apartment buildings.

Condominiums =     - \$243,500      n1-32

Apartment Buildings  = \$235,200   n2 = 32

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

option 1.)  H0: μ1 − μ2 = 0; HA: μ1 − μ2 ≠ 0

option 2.) H0: μ1 − μ2 ≥ 0; HA: μ1 − μ2 <>

option 3) H0: μ1 − μ2 ≤ 0; HA: μ1 − μ2 > 0

b.Compute the value of the test statistic and the corresponding p-value. (Round "test statistic" value to 2 decimal places and "p-value" to 3 decimal places.)

(solve)      Test statistic ______

(solve)        p-value    ________

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

Choose:  (Do not reject or Reject)  H0.At either the 5% significance levels, we (Can or Cannot) conclude the mean profitability differs between condominiums and apartment buildings.

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

Choose:  (Do not reject or Reject) H0.At either the 10% significance levels, (Can or Cannot) conclude the mean profitability differs between condominiums and apartment buildings.

Apr 10 2020 View more View Less