Question

Using a profit P1 of $5,000, a profit P2 of $4,500, and a profit P3 of $4,000, calculate a 95% confidence interval for the mean profit per customer that SoftBus can expect to obtain. (Round your answers to one decimal place.) Lower Limit Upper Limit

Answer 1

Answer:

Confidence Interval

Lower Limit = $4,233.3

Upper Limit = $4,766.7

With 95% confidence, the mean profit per customer that SoftBus can expect to obtain is between $4,233.30 and $4,766.7 based on the given sample data.

Step-by-step explanation:

The z-score of 95% = 1.96

             Profit         Mean      Square Root

                          Difference    of MD

P1        $5,000       $500        $250,000

P2         4,500          0              0

P3         4,000       -500         $250,000

Total $13,500                        $500,000

Mean $4,500 ($13,500/3)    $166,667 ($500,000/3)

Standard Deviation = Square root of $166,667 = 408.2

Margin of error = (z-score * standard deviation)/n

= (1.96 * 408.2)/3

= 266.7

= $266.7

Confidence Interval = Sample mean +/- Margin of error

= $4,500 +/- 266.7

Lower Limit = $4,233.3 ($4,500 - $266.7)

Upper Limit = $4,766.7 ($4,500 + $266.7)