For Business versus Engineering majors conduct a two sample test of the hypothes

Question

For Business versus Engineering majors conduct a two sample test of the hypothesis at the 10% significance level (assume the variances are not equal):

The average ’30-Year ROI’ for Business majors is less than for Engineering Majors. Be sure to interpret your results

Business Major

Engineering Major

School Type

School Type Cost 30 Year ROI Annual ROI Private $222,700.00 $1,786,000.00 7.70% Private $176,400.00 $1,758,000.00 8.40% Private $212,200.00 $1,714,000.00 7.80% Public $125,100.00 $1,535,000.00 9.10% Private $212,700.00 $1,529,000.00 7.40% Public $92,910.00 $1,501,000.00 10.10% Private $214,900.00 $1,485,000.00 7.30% Private $217,800.00 $1,483,000.00 7.20% Private $225,600.00 $1,444,000.00 7.00% Private $217,300.00 $1,442,000.00 7.10% Private $226,500.00 $1,441,000.00 7.00% Private $215,500.00 $1,438,000.00 7.20% Private $223,500.00 $1,428,000.00 7.00% Private $226,600.00 $1,414,000.00 7.00% Private $189,300.00 $1,397,000.00 7.50% Public $89,700.00 $1,382,000.00 9.90% Public $87,030.00 $1,376,000.00 10.00% Private $218,200.00 $1,343,000.00 6.90% Private $229,900.00 $1,339,000.00 6.70% Private $148,800.00 $1,321,000.00 8.10%

Explanation / Answer

Sol:

H0:There is no difference in means of two groups

H0:There is a difference in means of two groups

alpha:10%

Test statistc:

From Excel

t cal=7.20

COnclsuion:

P value=0.00000<0.1 we reject the H0. Hence Claim is significant

t-Test: Two-Sample Assuming Unequal Variances Business Engineering Mean 1477800 1838000 Variance 1.77E+10 3.23E+10 Observations 20 20 Hypothesized Mean Difference 0 df 35 t Stat -7.20389 P(T<=t) one-tail 1.04E-08 t Critical one-tail 1.306212 P(T<=t) two-tail 2.09E-08 t Critical two-tail 1.689572

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