Trevor is intersted in purchasing the local hardware/sportinggoods store in the

Question

Trevor is intersted in purchasing the local hardware/sportinggoods store in the small town of Dove Creek, Montana. Afterexamining accounting records for the past several years, he foundthat the store has been grossing over $850 per day about 60% of thebusiness days it is open. Estimate the probability that hte storewill gross over $850 a. at least 3 out of 5 business days. b. at least 6 out of 10 business days. c. fewer than 5 out of 10 business days. d. fewer than 6 out of the next 20 business days. It thisactually happened, might it shake your confidence in the statment p˜ 0.60? Might it make you suspect that p is less than 0.60?Explain. e. more than 17 out of the next 20 business days. If thisactually happened, might you supect that p is greater than 0.60?explain. Trevor is intersted in purchasing the local hardware/sportinggoods store in the small town of Dove Creek, Montana. Afterexamining accounting records for the past several years, he foundthat the store has been grossing over $850 per day about 60% of thebusiness days it is open. Estimate the probability that hte storewill gross over $850 a. at least 3 out of 5 business days. b. at least 6 out of 10 business days. c. fewer than 5 out of 10 business days. d. fewer than 6 out of the next 20 business days. It thisactually happened, might it shake your confidence in the statment p˜ 0.60? Might it make you suspect that p is less than 0.60?Explain. e. more than 17 out of the next 20 business days. If thisactually happened, might you supect that p is greater than 0.60?explain.

Explanation / Answer

Trevor isintersted in purchasing the local hardware/sporting goods store inthe small town of Dove Creek, Montana. After examining accountingrecords for the past several years, he found that the store hasbeen grossing over $850 per day about 60% of the business days itis open. Estimate the probability that hte store will gross over$850

a. atleast 3 out of 5 business days.
     = {k = 3 to 5}Binomial{k, n = 5, p =0.6} = 0.6826

b. at least6 out of 10 business days.
     = {k = 6 to 10} Binomial{k, n =10, p = 0.6} = 0.6331

c. fewerthan 5 out of 10 business days.
     = {k = 0 to 4} Binomial{k, n =10, p = 0.6} = 0.1662

d. fewerthan 6 out of the next 20 business days. It this actually happened,might it shake your confidence in the statement p = 0.60? Might itmake you suspect that p is less than 0.60?Explain.
     = {k = 0 to 5} Binomial{k, n =20, p = 0.6} = 0.001612
     {If aboveoccurred, we would reject p = 0.6 @ 0.01 SignificanceLevel}

e. more than17 out of the next 20 business days. If this actually happened,might you suspect that p is greater than 0.60?explain.
     = {k = 18 to 20} Binomial{k, n =20, p = 0.6} = 0.003611
     {If aboveoccurred, we would reject p = 0.6 @ 0.01 SignificanceLevel}

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