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Trevor is interested in purchasing the local hardware/sporting goods store in th

ID: 3175298 • Letter: T

Question

Trevor is interested in purchasing the local hardware/sporting goods store in the small town of Dove Creek, Montana. After examining accounting records for the past several years, he found that the store has been grossing over $850 per day about 50% of the business days it is open. Estimate the probability that the store will gross over $850 for the following. (Round your answers to three decimal places.) (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 If the outcome described in part (d) actually occurred, might it shake your confidence in the statement p = 0.50? Might it make you suspect that p is less than 0.50? Explain. Yes. This is unlikely to happen if the true value of p is 0.50. Yes. This is likely to happen if the true value of p is 0.50. No. This is unlikely to happen if the true value of p is 0.50. No. This is likely to happen if the true value of p is 0.50. (e) more than 17 out of the next 20 business days If the outcome described in part (e) actually occurred, might you suspect that p is greater than 0.50? Explain. Yes. This is unlikely to happen if the true value of p is 0.50. Yes. This is likely to happen if the true value of p is 0.50. No. This is unlikely to happen if the true value of p is 0.50. No. This is likely to happen if the true value of p is 0.50.

Explanation / Answer

Result:

Trevor is interested in purchasing the local hardware/sporting goods store in the small town of Dove Creek, Montana. After examining accounting records for the past several years, he found that the store has been grossing over $850 per day about 50% of the business days it is open. Estimate the probability that the store will gross over $850 for the following. (Round your answers to three decimal places.)

P( x3) = 0.5

(b) at least 6 out of 10 business days

P( x 6) = 0.377

(c) fewer than 5 out of 10 business days

P( x <5) = 0.377

(d) fewer than 6 out of the next 20 business days

P( x<6) = 0.021

If the outcome described in part (d) actually occurred, might it shake your confidence in the statement p = 0.50? Might it make you suspect that p is less than 0.50? Explain.

Answer: Yes. This is unlikely to happen if the true value of p is 0.50.

Yes. This is likely to happen if the true value of p is 0.50.

No. This is unlikely to happen if the true value of p is 0.50.

No. This is likely to happen if the true value of p is 0.50.

(e) more than 17 out of the next 20 business days

P( >17) = 0.0002

If the outcome described in part (e) actually occurred, might you suspect that p is greater than 0.50? Explain.

Answer: Yes. This is unlikely to happen if the true value of p is 0.50.

Yes. This is likely to happen if the true value of p is 0.50.

No. This is unlikely to happen if the true value of p is 0.50.

No. This is likely to happen if the true value of p is 0.50.

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