Sports and media magnate Ned Sterner is interested in purchasing the Atlanta Stalwarts if he can be reasonably certain that operating the team will not be too costly. He figures that average attendance would have to be about 28,500 fans per game to make the purchase attractive to him. Ned randomly chooses 64 home games over the past 4 years and finds from figures reported in Sporting Reviews that average attendance at these games was 26,100. A study he commissioned the last time he purchased a team showed that the population standard deviation for attendance at similar events had been quite stable for the past 10 years at about 6,000 fans. Using 2 standard errors as the decision criterion, should Ned purchase the Stalwarts? Can you think of any reason(s) why your conclusion might not be valid?
Contact us for the solution