In an article in the Journal of Management Information Systems, Mahmood and Mann investigate how information technology
Question:
a. Suppose a random sample of 15 companies considered to use information systems effectively yields a sample mean IT budget as a percentage of company revenue of = 2.73 with a standard deviation of s = 1.64. Assuming that IT budget percentages are approximately normally distributed, calculate a 99 percent confidence interval for the mean IT budget as a percentage of company revenue for all firms that use information systems effectively. Does this interval provide evidence that a firm can successfully use information systems with an IT budget that is less than 5 percent of company revenue? Explain.
b. Suppose a random sample of 15 companies considered to use information systems effectively yields a sample mean number of PCs and terminals as a percentage of total employees of = 34.76 with a standard deviation of s = 25.37. Assuming approximate normality, calculate a 99 percent confidence interval for the mean number of PCs and terminals as a percentage of total employees for all firms that use information systems effectively. Why is this interval so wide? What can we do to obtain a narrower (more useful) confidence interval?
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Related Book For
Business Statistics In Practice
ISBN: 9780073401836
6th Edition
Authors: Bruce Bowerman, Richard O'Connell
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