Question 2: The Malawi Revenue Authority has made a statement claiming that the average salary for workers in Lilongwe is MWK 500,000. XYZ Consulting is an HR consultancy that wishes to test this statement. A sample of 100 employees was taken, and the average salary was found to be MWK 520,000, with a population standard deviation of MWK 50,000.
i. Test this claim at a 5% significance level.
ii. What would be the effect of testing the claim at a 1% significance level?
B.) The wheat manufacturing industry in Zimbabwe is facing tough competition, and they want to improve their revenue. The company expects to make a revenue of USD 200,000 under its current operating capacity. They have hired the services of BPO Solutions to suggest possible strategies to enhance performance. BPO Solutions has listed the following options:
a. Continue operating at the current capacity.
b. Upgrade the entire operating machinery for USD 10,000. If the upgrade is successful, an increase in revenue of USD 300,000 is expected, but if it's unsuccessful, revenue is expected to increase by only USD 50,000. The probability of success is 0.7.
c. Upgrade the machinery partially focusing only on essential machinery, costing USD 100,000. If the upgrade is successful, the expected revenue would be USD 250,000, but if it's unsuccessful, revenue would be only USD 70,000. The probability of successful implementation is 0.9.
Based on this information, determine the best course of action for the company and provide comments on your findings. Business statistics.