Question

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 34 for each such local business ventures. For the analysis, he uses a historical (population) standard deviation of $21,900 for condominiums and $19,600 for apartment buildings. (You may find it useful to reference the appropriate table: z table or t table) Sample 1 represents condominiums and Sample 2 represents apartment buildings. Condominiums Apartment Buildings x⎯⎯1 = $252,000 x⎯⎯2 = $235,600 n1 = 34 n2 = 34 a. Set up the hypotheses to test whether the mean profitability differs between condominiums and apartment buildings. H0: μ1 − μ2 = 0; HA: μ1 − μ2 ≠ 0 H0: μ1 − μ2 ≥ 0; HA: μ1 − μ2 < 0 H0: μ1 − μ2 ≤ 0; HA: μ1 − μ2 > 0 b. Calculate the value of the test statistic. (Round your answer to 2 decimal places.) c. Find the p-value. p-value < 0.01 p-value 0.10 0.05 p-value < 0.10 0.025 p-value < 0.05 0.01 p-value < 0.025 d-1. At the 5% significance level, what is the conclusion to the test? d-2. At the 10% significance level, what is the conclusion to the test?

Answer 1