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Question: A group of investors wants to develop a chain of fast-food restaurants. In determining potential costs
for each facility, they must consider, among other expenses, the average monthly electric bill. They
decide to sample some fast-food restaurants currently operating to estimate the monthly cost of
electricity. They want to be 90% confident of their results and want the error of the interval estimate to
be no more than $100. They estimate that such bills range from $600 to $2,500. How large a sample
should they take? Edit

Answer: z_c = 1.65
margin of error, E = 100
sd = (2500 - 600)/4 = 475

E = (sd*z_c)/sqrt(n)
or, 100 = (475*1.65)/sqrt(n)
or, n = (475*1.65)^2/100^2 = 61.426 = 62 (Ans.) Edit

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