Question 1010581: To profitably produce a planned upgrade of a software product you make, you must charge customers $100. Are your customers willing to pay this much? You contact a random sample of 40 customers and find 11 would pay $100 for the upgrade. If the upgrade is to be profitable, you will need to sell it to more than 20% of your customers. Do the sample data give good evidence that more than 20% are willing to buy?
Include the following elements in your test.
Hypotheses (3 pts)
Model (4 pts) Note which condition is not met, but continue with the test anyway.
Mechanics (5 pts)
Conclusion (4 pts)
Answer by stanbon(75887)   (Show Source):
You can put this solution on YOUR website! To profitably produce a planned upgrade of a software product you make, you must charge customers $100. Are your customers willing to pay this much? You contact a random sample of 40 customers and find 11 would pay $100 for the upgrade. If the upgrade is to be profitable, you will need to sell it to more than 20% of your customers. Do the sample data give good evidence that more than 20% are willing to buy?
Include the following elements in your test.
Hypotheses (3 pts)
Ho: p <= 0.2
Ha: p > 0.2 (claim)
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p-hat = 11/40 = 0.275
test stat:: z(0.275) = (0.275-0.2)/sqrt[0.275*0.725/40] = 1.0632
p-value = P(z > 1.0632) = 0.1440
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Since the p-value is greater than 5%, fail ro reject Ho.
The test results do not support the claim.
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Cheers,
Stan H.
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