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A direct mail appeal for contributions from a university's alumni and supporters is considered cost effective if more than 15% of the alumni and supporters

A direct mail appeal for contributions from a university's alumni and supporters is considered cost effective if more than 15% of the alumni and supporters provide monetary contributions. To determine if a direct mail appeal is cost effective, the fundraising director sends the direct mail brochures to a simple random sample of 250 people on the alumni and supporters mailing lists. He receives monetary contributions from 40 people. Does this evidence support the cost effectiveness of the direct mail appeal? Use a 0.05 level of significance. Ho: .15 Ha : > .15 = = 40 250_ = .16 = = 0.443 Test Statistic (1 ) = .16 .15 .15(1 .15) 250 Critical Value: invNorm(.05): 1.645 p-value: 0.3290 (On Calculator) p-value 0.3290 > 0.05 Fail to reject. Conclusion: At the .05 level of significance, the evidence does not support the cost effectiveness of the direct mail campaign at the 0.005 level of significance (i.e. not sufficient evidence).

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