Management in a large hospital is planning to install a computer to reduce the time spent by nurses doing paperwork. First, management needed to know how much time nurses spend doing paperwork in order to estimate the potential savings from the computer installation. A work sampling study comprising 500 observations taken at random over a week yielded the following data:

Activity ..................................................................Number of Observations
Attending to patients .......................................................180
Moving between stations ..................................................40
Consulting with doctors ....................................................60
Taking a break or idle .......................................................50
Doing paperwork ............................................................170

a. Estimate the proportion of time that the nurses spend doing paperwork.
b. Construct a 95 percent confidence interval for your estimate.
c. If an hour of a nurse’s time costs the hospital $40, estimate the annual savings in cost if the installation of the computer cuts time spent on paperwork by 80 percent. Assume 24 hours per day, 365 days per year of operation.