Question
In: Statistics and Probability
The daily net cash flows in the table below represent a 5-day sample. Use the Data...
The daily net cash flows in the table below represent a 5-day sample. Use the Data Analysis tool in Excel to calculate the 95% and 99% confidence intervals for the daily net cash flows. Along with your calculation, interpret the meaning behind your confidence interval estimates and discuss why the 99% confidence interval is wider.
|
Day |
Net Cash Flow |
|
1 |
15,000 |
|
2 |
17,000 |
|
3 |
13,000 |
|
4 |
20,000 |
|
5 |
14,000 |
Solutions
Expert Solution
Solution :
Interpretation of 95 % confidence interval.
The 95 % confidence interval of mean denote that if we drawn 1000 random sample then the value of 950 sample mean lies within that 95% confidence interval.
Excel provide us confidence level ,
Lower limit = mean - confidence level.
Upper limit = mean + confidence level.
orchestra answered 2 years agoRelated Solutions
The daily net cash flows in the table below represent a 5-day sample. Use the Data...
The daily net cash flows in the table below represent a 5-day
sample. Use the Data Analysis tool in Excel to calculate the 95%
and 99% confidence intervals for the daily net cash flows. Along
with your calculation, interpret the meaning behind your confidence
interval estimates and discuss why the 99% confidence interval is
wider.
Day
Net Cash Flow
1
15,000
2
17,000
3
13,000
4
20,000
5
14,000
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n Process A Process B
0 -$38,000 -$38,000
1 $17,510 $17,150
2 $15,750 $17,150
3 $13,990 $17,150
4 $12,230 $17,150
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0
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Cash Flow
1
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2
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5
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6
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2.
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Annual Saving Y ('000 dollars)
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60
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B1
B2
n
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Salvage Value
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Salvage Value
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—
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31
36
35
41
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