Mathematics, 09.04.2021 04:30 annakoslovsky3040

Advertising expenses are a significant component of the cost of goods sold. Listed below is a frequency distribution showing the advertising expenditures for 75 manufacturing companies located in the Southwest. The mean expense is $50.93 million and the standard deviation is $10.80 million. Is it reasonable to conclude the sample data are from a population that follows a normal probability distribution? Advertising Expense ($ Million)Number of Companies 25 up to 35 4 35 up to 45 19 45 up to 55 27 55 up to 65 16 65 up to 75 9 Total 75

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Answer from: kovicicic

Step-by-step explanation:

The table can be computed as:

Advertising Expenses ($ million) Number of companies

25 up to 35 4

35 up to 45 19

45 up to 55 27

55 up to 65 16

65 up to 75 9

TOTAL 75

Let's find the probabilities first:

$P(25 - 35) = P \Big(\dfrac{25-50.93}{10.80}$

For 35 up to 45

$P(35 - 45) = P \Big(\dfrac{35-50.93}{10.80}$

For 45 up to 55

$P(45 - 55) = P \Big(\dfrac{45-50.93}{10.80}$

For 55 up to 65

$P(55 - 65) = P \Big(\dfrac{55-50.93}{10.80}$

For 65 up to 75

$P(65 - 75) = P \Big(\dfrac{65-50.93}{10.80}$

Chi-Square Table can be computed as follows:

Expense No of Probabilities(P) Expe (O-E)^2 $\dfrac{(O-E)^2}{E}$

compa cted E (n*p)

nies (O)

25-35 4 0.0612 75*0.0612 = 4.59 0.3481 0.0758

35-45 19 0.2218 75*0.2218 = 16.635 5.5932 0.3362

45-55 27 0.3568 75*0.3568 = 26.76 0.0576 0.021

55-65 16 0.2552 75*0.2552 = 19.14 9.8596 0.5151

65-75 9 0.0839 75*0.0839 = 6.2925 7.331 1.1650

$\sum \dfrac{(O-E)^2}{E}= 2.0492$

Using the Chi-square formula:

$X^2 = \dfrac{(O-E)^2}{E} \\ \\ Chi-square \ X^2 = 2.0942$

Null hypothesis:

$H_o: \text{The population of advertising expenses follows a normal distribution}$

Alternative hypothesis:

$H_a: \text{The population of advertising expenses does not follows a normal distribution}$

Assume that:

$\alpha = 0.02$

degree of freedom:

= n-1

= 5 -1

= 4

Critical value from X^2 = 11.667

Decision rule: To reject $H_o \ if \ X^2$ test statistics is greater than X^2 tabulated.

Conclusion: Since X^2 = 2.0942 is less than critical value 11.667. Then we fail to reject H_o

Answer from: Quest

answer: true

step-by-step explanation:

Answer from: Quest

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step-by-step explanation:

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