Assignment 1: Median Home Values: CFO/HR Policy Study

Due Week 10 and worth 140 Points

You are the Chief Financial Officer of a rapidly expanding firm. You have been tasked to work with your companys HR Director to determine the impact of companys expansion plans on salaries. Here is the problem

The firm for which you are working is growing. They have announced that they will open facilities in ten states. Those currently working for the firm will have opportunities to re-locate at some of these new facilities. The problem faced is the following: What will be the cost of moving employees to potentially high housing cost locations. The companys current policy is that employees moving to a location where the cost of housing is 2 standard deviations above the national average of median home prices will receive an automatic 10% salary adjustment. Therefore, you must determine in how many of the new states you will have to pay the increased salary.

The company expects to open new locations in the following ten states.

Oklahoma $112,900

Texas $128,400

Louisiana $138,800

Florida $154,900

Arizona $158,100

N. Mexico $159,300

Nevada $161,300

Utah $209,000

Colorado $235,800

California $358,800

You have assembled the following data and will perform the following statistical analyses to determine in how many states the company will have to pay increased salaries.

1. Calculate the mean, median, and standard deviation for both the sample of new states in which you will have facilities AND calculate the mean, median and standard deviation for the national population of median home prices. You note that there are 51 observations in the population.
2. Using the sample construct a 95% confidence interval for the population mean.
3. Determine how many of the sample states fall outside the confidence interval and identify the states.
4. Formulate an appropriate hypothesis test to determine ifyour suspicionis correct that the new states in which you will be building facilitieshave higher average median pricefor homes than the average median price for the population.
5. Based on your conclusion from the hypothesis, is it likely that the firm will experience a significant increase in its salary cost.

Prepare and explain your calculations. Use the evidenceto write a paper explaining your decisions: In how many and which states will increased salaries have to be paid and will the company experience a significant increase in salary costs.

Your assignment must follow these formatting requirements:

1. It must be types, double spaces and use Times New Roman font 12

2. It must have one-inch margins on all sides.

3. You are not required to cite references for formulas, definitions, etc.

4. It must have a title page and running header.

Median Property Value by State: Homes 2010-2012 US Census Report Home Value
	Price In Current Dollars
	2010-2012
Alabama	$123,400
Alaska	$241,400
Arizona	$158,100
Arkansas	$106,900
California	$358,800
Colorado	$235,800
Connecticut	$278,600
Delaware	$235,900
District of Columbia	$436,000
Florida	$154,900
Georgia	$149,300
Hawaii	$503,100
Idaho	$160,000
Illinois	$179,900
Indiana	$122,600
Iowa	$124,300
Kansas	$128,500
Kentucky	$120,800
Louisiana	$138,800
Maine	$173,900
Maryland	$289,300
Massachusetts	$328,300
Michigan	$119,200
Minnesota	$185,800
Mississippi	$100,000
Missouri	$137,100
Montana	$183,600
Nebraska	$127,800
Nevada	$161,300
New Hampshire	$239,100
New Jersey	$325,800
New Mexico	$159,300
New York	$286,700
North Carolina	$152,800
North Dakota	$130,500
Ohio	$130,600
Oklahoma	$112,900
Oregon	$233,900
Pennsylvania	$164,700
RhodeIsland	$245,300
South Carolina	$136,300
South Dakota	$131,600
Tennessee	$138,400
Texas	$128,400
Utah	$209,000
Vermont	$215,700
Virginia	$243,100
Washington	$256,500
West Virginia	$98,300
Wisconsin	$167,200
Wyoming	$183,200
Data from Home Value and Homeownership Rates: Recession and Post-Recession Comparisons
From 2007-2009 to 2010-2012 US Census Report ACSBR 12-20