Company X set up a two-month trial phase to assess the bus line's profitability (44 weekdays). The
Question:
Company X set up a two-month trial phase to assess the bus line's profitability (44 weekdays). The average daily fees received throughout this experiment are kr 12,640, with a kr 1,500 standard deviation. Assume you are a consultant giving Company X advice on this project. Company X wants to know whether they should keep providing the express bus service based on the outcomes of the test.
A) One of your coworkers advises that rather than making a 90% confidence interval, you should make a 95% confidence interval. Would a 95% confidence interval serve Company X's needs better? Explain. (Remember that you do not need to create the 95% CI.)
B) How could Company X create a confidence interval with greater accuracy?
C) For Company X to have a 95% confidence level in calculating the true mean daily income to within $9.55 how many days' worth of data must Company X gather? Does a $9.55 margin of error seem like an acceptable objective?
Management Accounting Information for Decision-Making and Strategy Execution
ISBN: 978-0137024971
6th Edition
Authors: Anthony A. Atkinson, Robert S. Kaplan, Ella Mae Matsumura, S. Mark Young