NicotineLess Inc. Lo Nic Cigarettes: Investigating the Claim

What is Yamamoto planning to investigate regarding NicotineLess Inc.'s Lo Nic cigarettes?

Yamamoto wants to quit smoking and is suspicious of the claim made by NicotineLess Inc. He plans to investigate the advertised claim regarding the amount of nicotine delivered by their Lo Nic cigarettes. What hypotheses will he test?

Yamamoto's Investigation

Yamamoto plans to investigate the claim made by NicotineLess Inc. about the amount of nicotine delivered by their Lo Nic cigarettes. He will conduct a hypothesis test by collecting a random sample of 12 Lo Nic cigarettes and measuring the nicotine content. If the sample mean is significantly greater than 343 mcg, Yamamoto will reject the claim made by NicotineLess Inc. and file a complaint for false advertising.

Hypothesis testing is a statistical method used to make inferences about a population based on a sample. In this case, Yamamoto wants to investigate the claim made by NicotineLess Inc. about the amount of nicotine delivered by their Lo Nic cigarettes.

The null hypothesis (H0) is that the mean nicotine content is equal to 343 mcg, while the alternative hypothesis (Ha) is that the mean nicotine content is greater than 343 mcg. Yamamoto plans to collect a random sample of 12 Lo Nic cigarettes and measure the nicotine content.

To conduct the hypothesis test, Yamamoto will calculate the sample mean and compare it to the claimed mean of 343 mcg. If the sample mean is significantly greater than 343 mcg, Yamamoto will reject the null hypothesis and conclude that the claim made by NicotineLess Inc. is false.

Yamamoto will use statistical calculations to determine the p-value, which represents the probability of obtaining a sample mean as extreme as the one observed, assuming the null hypothesis is true. If the p-value is less than a predetermined significance level (usually 0.05), Yamamoto will reject the null hypothesis.

In this case, Yamamoto will compare the sample mean to the critical value corresponding to the chosen significance level. If the sample mean is greater than the critical value, Yamamoto will reject the null hypothesis and conclude that the claim made by NicotineLess Inc. is false.

← Financial risk management key tasks The reflection on equity carve outs in business decisions →