WEEK 4 DQ 1.docx - Solution We use six steps to calculate...

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Solution, We use six steps to calculate the value of t. Step 1 We state hypothesis to be tested in first step which are called as null hypothesis and the alternative hypothesis. In this question upper level management wants to know if there is a difference in the mean amounts purchases on impulse at the two stores. An alternative way to state this question is the mean amount purchased on impulse at the First Street store is equal to the mean amount purchased at the Main Street store. Therefore the null hypothesis is the equality part. The null and alternative hypothesis are: H 0 : µ f = µ m H 1 : µ f ≠ µ m Step 2 Selecting the level of significance to be used in the test. Here the level of significance is 5% i.e. 0.05 which means there is % chance that we will reject null hypothesis when it is true. Step 3 The critical values for the test areas are based on degree of freedom, and in this problem the degree of freedom is equal to 10+14-2 i.e. 22, the critical 2 values are -2.074 and 2.074.

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