You suspect that the average franchise costs for those inter

You suspect that the average franchise costs for those interested in starting a franchise business is incorrect looking at the table you saw in a magazine. You surveyed 41 randomly selected companies and the sample mean of data was $135,000 withe a standard deviation of $30,000. Using a level of significance of 5%, is there enough evidence to support your claim?

Solution

Set Up Hypothesis
Null, H0: U=143260
Alternate, H1: U!=143260
Test Statistic
Population Mean(U)=143260
Sample X(Mean)=135000
Standard Deviation(S.D)=30000
Number (n)=41
we use Test Statistic (t) = x-U/(s.d/Sqrt(n))
to =135000-143260/(30000/Sqrt(41))
to =-1.763
| to | =1.763
Critical Value
The Value of |t | with n-1 = 40 d.f is 2.021
We got |to| =1.763 & | t | =2.021
Make Decision
Hence Value of |to | < | t | and Here we Do not Reject Ho
P-Value :Two Tailed ( double the one tail ) -Ha : ( P != -1.763 ) = 0.0855
Hence Value of P0.05 < 0.0855,Here We Do not Reject Ho

We have enough evidence to support the cliam