ANOVA test for earnings in 3 divisions
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A corporate CEO reviews the earnings of three divisions over the last eighteen months. Each division reports its earnings quarterly. Based on the earnings below, is there sufficient evidence to conclude, at the 99% level of confidence, that one of these divisions is more profitable than the others?
Division I Division II Division III
45 5 22
52 13 15
57 34 22
19 28 4
57 12 9
4 5 13
· State the null and alternate hypotheses
· Calculate the sums of squares SS(total), SS(factor), and SS(error)
· Calculate the degrees of freedom df(total), df(factor), and df(error)
· Calculate the mean square for factor, and the mean square for error
· Calculate the F-statistic
· Determine the critical value(s)
· State your decision: Should the null hypothesis be rejected?
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Solution Summary
Step by step method for computing test statistic for One way ANOVA is given in the answer.
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