Earth Engineering is an environmental engineering consulting firm with more than 50 offices nationwide. Within the state of Texas, there are 5 offices; however, the focus of this problem resides with the office located in Austin. The Austin office currently houses 54 employees; however, the original office space of 10,000 square feet was designed for 50 employees. To accommodate the immediate employee seating arrangements and to acquire room for additional growth, the office is looking for new space. The terms of the lease are for a 5-year period for $25k/month. Office management would like to locate other available office space within a 10-mile radius of the 78746 zip code.
Step 1: State the null and alternative hypothesis.
Step 2: Determine the level of significance
Using the .05 significance level, can we conclude that there is a difference in monthly rent at the other locations?
Step 3: Determine the test statistic: the test statistic is the F distribution
Step 4: Formulate the decision rule: Decision rule is to reject Ho if the calculated F is greater than the critical value of 3.89. Critical Value = 3.89 (Based off a numerator df of 2, and a denominator df of 12).
Step 5: Select the sample and perform the calculations
Step 6: Make a decision: We fail to reject the null hypothesis because the calculated F is less than the critical value of 3.89.
Word and Excel files give all the steps to completing statistical tests on given data.