A group of investors wants to develop a chain of fast-food restaurants. In deter

ID: 2982713 • Letter: A

Question

A group of investors wants to develop a chain of fast-food restaurants. In determining potential costs

for each facility, they must consider, among other expenses, the average monthly electric bill. They

decide to sample some fast-food restaurants currently operating to estimate the monthly cost of

electricity. They want to be 90% confident of their results and want the error of the interval estimate to

be no more than $100. They estimate that such bills range from $600 to $2,500. How large a sample

should they take?

E = $100 Range = $2,500 - $600 = $1,900 90% Confidence z.05 = 1.645 ?=255E=Z(?/2)(?/?n)n=25

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