A Large Carpet Store Wishes to Determine If the Brand

question 4

Essay

A large carpet store wishes to determine if the brand of carpet purchased is related to the purchaser's family income. As a sampling frame, they mailed a survey to people who have a store credit card. Five hundred customers returned the survey and the results follow: $$\begin{array} { | l | c | c | c | } \hline & & { \text { Brand of Carpet } } \\\hline \text { Family Income } & \text { Brand A } & \text { Brand B } & \text { Brand C } \\\hline \text { High income } & 65 & 32 & 32 \\\hline \text { Middle income } & 80 & 68 & 104 \\\hline \text { Low income } & 25 & 35 & 59 \\\hline\end{array}$$ At the 5% level of significance, can you conclude that the brand of carpet purchased is related to the purchaser's family income?

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Definitions:

CRA

Canada Revenue Agency, the federal agency that administers tax laws for the Government of Canada and for most provinces and territories.

Lease Agreement

A contract specifying the terms under which one party agrees to rent property owned by another party.

Economic Life

Refers to the duration over which an asset remains productive or useful for its intended purpose.

Capital Lease

A lease agreement that is considered a purchase of an asset for accounting purposes, because it transfers substantially all the risks and rewards of ownership.