Use the Following Information to Answer Questions (11)-(13)

question 25

Multiple Choice

Use the following information to answer questions (11) -(13) . According to the website www.costofwedding.com,
the average cost of flowers for a wedding is $698. Recently, in a random sample of 40 weddings in the U. S. it
was found that the average cost of the flowers was $734, with a standard deviation of $102. On the basis of this, a
95% confidence interval for the mean cost of flowers for a wedding is $701 to $767.
-For this description, which of the following does not describe a condition for a valid confidence interval?

• A)The description states that the sample was randomly selected, so we can assume that the condition which states that the data must represent a random sample is satisfied.
• B)The sample observations are independent because knowledge about the cost of flowers for any one wedding tells us nothing about the cost of flowers for any other wedding in the sample.
• C)The sample size of 40 is large enough that knowledge about the population distribution is not necessary and the condition that the population be normally distributed or sample size be
• Larger than 25 is satisfied.
• D)All of the above describe conditions for a valid confidence interval.

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Definitions:

Fixed Intervals

Regular, predetermined periods of time during which certain activities or operations occur.

Equal Cash Flows

A series of identical cash inflows or outflows occurring over a specified period.

Annuity

A series of equal cash receipts spaced equally in time; a series of equal net cash flows at fixed time intervals.

Sensitivity Analysis

A form of analysis that considers the impact of changing one or more inputs or assumptions on the resulting outcome.