For large U.S. companies, what percentage of their total income comes from foreign sales? A random sample of technology companies (IBM, Hewlett-Packard, Intel, and others) gave the following information.

Technology companies, % foreign revenue: x₁; n₁ = 16

Another independent random sample of basic consumer product companies (Goodyear, Sarah Lee, H.J. Heinz, Toys “R” Us) gave the following information.

Basic consumer product companies, % foreign revenue: x₂; n₂ = 17

(Reference: Forbes Top Companies.) Assume that the distributions of percentage foreign revenue are mound-shaped and symmetric for these two company types.

(a) Use a calculator with mean and standard deviation keys to verify that x̅₁ » 51.66, s₁ » 7.93, x̅₂ » 33.60, and s₂ » 12.26.

(b) Let m₁ be the population mean for x₁ and let m₂ be the population mean for m₂. Find an 85% con­fidence interval for m₁ – m₂.

(c) Interpretation Examine the confi­dence interval and explain what it means in the context of this problem. Does the interval consist of numbers that are all positive? all negative? of different signs? At the 85% level of confi­dence, do technology companies have a greater percentage foreign revenue than basic consumer product companies?

(d) Check Requirements Which distribution (standard normal or Student’s t) did you use? Why?

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