A City Is Considering Widening a Busy Intersection in Town

question 104

Essay

A city is considering widening a busy intersection in town.Last year,the city reported 16,000 cars passed through the intersection per day.The city conducted a survey for 49 days this year and found an average of 17,000 cars passed through the intersection,with a standard deviation of 5,000.
a.Specify the null and alternative hypotheses to determine whether the intersection has seen an increase in traffic.
b.Calculate the value of the test statistic and approximate the p-value.
c.The city is going to widen the intersection if it believes traffic has increased.At the 5% significance level,can you conclude that the intersection has seen an increase in traffic? Should the city widen the intersection?

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Definitions:

Market Value

The present cost set for assets or services to be traded in the marketplace.

Investment Criteria

The guidelines or metrics used by investors or managers to assess the attractiveness of an investment or project.

Shareholders' Interests

The stakes or claims that individuals or entities holding shares in a company have in terms of dividends, voting rights, and share in residual assets.

Crossover Rate

The point at which two different investment projects have the same net present value (NPV) or rate of return, often used in capital budgeting to compare the desirability of projects.