Question

An entrepreneur is considering the purchase of a coin-operated laundry. The current owner claims that over the past 5 years, the mean daily revenue was $675 with a population standard deviation of $75. A sample of 30 days reveals a daily mean revenue of $625. If you were to test the null hypothesis that the daily mean revenue was $675, which test would you use

Answer 1

One sample t test

Explanation:

A one proportion sample t test is employed when we intend to test the sample mean of a certain sample against a particular or specified population property . In the scenario above, we could use the information given to obtain the one sample proportion test statistic by using the formular :

Test statistic = (xbar - μ) ÷ (σ/sqrt(n))

Where, xbar = sample mean ;

μ = population mean

σ = population standard deviation

n = sample size

Using the test statistic, we can then obtain the Pvalue and compare to the specified α - level