Performance tires plans to engage in direct mail advertising. it is currently in negotiations to purchase a mailing list of the names of people who bought sports cars within last three years. the owner of the mailing list claims that sales generated by contacting names on the list will more than pay for the cost of using the list (typically a company will not sell its list of contacts, but rather provides the mailing services, for example, the owner of the list would handle addressing and mailing catalogs).

before it is willing to pay the asking price of $ 3 per name, the company obtains a sample of 225 names and addresses randomly from the list to run a small experiment. it sends a promotional mailing to each of these customers. the data for this exercise (excel file "sales") shows the gross dollar value of orders produced by this experimental mailing. the company makes a profit of 20% of the gross dollar value of a sale. for example, an order for $ 100 produces a $ 20 profit.

1. why would a company want to run an experiment? why not just buy the list and see what happens?
2. why would the holder of the list agree to allow the potential purchaser to run an experiment?
3. why is a hypothesis test relevant in this situation?
4. describe the appropriate hypothesis and present the statistical hypothesis. ensure that you report it in words /sentences and in symbolic form.
5. summarize (descriptive statistics) the results of the sales from sample mailing. use appropriate numerical statistics and graphs / charts. write a short report (not more than 10 lines on the distribution of sales for the sample mailing).
6. perform a formal statistical test of hypothesis. clearly report each step in the hypothesis. feel free to use any resource to simplify your calculation. report only relevant and important calculations / tables (if any).