Large U.S. Companies: Foreign Revenue 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 5 16 62.8 55.7 47.0 59.6 55.3 41.0 65.1 51.1 53.4 50.8 48.5 44.6 49.4 61.2 39.3 41.8 Another independent random sample of basic consumer product companies (Goodyear, Sarah Lee, H.J. Heinz, Toys “ ” Us) gave the following information.
Basic consumer product companies, % foreign revenue: x2; n2 517 28.0 30.5 34.2 50.3 11.1 28.8 40.0 44.9 40.7 60.1 23.1 21.3 42.8 18.0 36.9 28.0 32.5 (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 x1 < 51.66, s1 < 7.93, x2 < 33.60, and s2 < 12.26.

(b) Let m1 be the population mean for x1 and let m2 be the population mean for x2. Find an 85%
confidence interval for m1 2m2.

(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?AppendixLO1