Cindy Ho, VP of Finance at Discrete Components, Inc Using $\alpha$

question 80

Multiple Choice

Cindy Ho, VP of Finance at Discrete Components, Inc.(DCI) , theorizes that the discount rate offered to credit customers affects the average collection period on credit sales.Accordingly, she has designed an experiment to test her theory using four sales discount rates (0%, 2%, 4%, and 6%) by randomly assigning five customers to each sales discount rate.An analysis of Cindy's data produced the following ANOVA table. $$\begin{array} { | r | r | r | r | r | } \hline \text { Source of Variation } & \mathrm { SS } & \mathrm { df } & \mathrm { MS } & \mathrm { F } \\\hline \text { Treatrnent } & 1844.2 & \mathbf { 3 } & 614.7333 & 7.568277 \\\hline \text { Error } & 1299.6 & 16 & 81.225 & \\\hline \text { Total } & 3143.8 & 19 & & \\\hline\end{array}$$ Using $\alpha$ = 0.01, the appropriate decision is _________.

• A)reject the null hypothesis \(\mu\)₁=\(\mu\)₂=\(\mu\)₃=\(\mu\)₄
• B)reject the null hypothesis \(\mu\)₁ \(\neq\) \(\mu\)₂ \(\neq\)\(\mu\)₃ \(\neq\)\(\mu\)₄
• C)do not reject the null hypothesis \(\mu\)₁=\(\mu\)₂=\(\mu\)₃=\(\mu\)₄=\(\mu\)₅
• D)do not reject the null hypothesis \(\mu\)₁ \(\neq\) \(\mu\)₂\(\neq\)\(\mu\)₃ \(\neq\)\(\mu\)₄ \(\neq\) \(\mu\)₅
• E)do nothing

---

Definitions:

Accounting Equation

The foundation of double-entry bookkeeping, which asserts that assets equal the sum of liabilities and shareholders' equity.

Owner's Equity

The residual interest in the assets of an entity after deducting liabilities; it represents the ownership interest of the shareholders or owner in the company.

Assets

Resources owned by a company from which future economic benefits are expected to flow to the entity.

Owner's Equity

The residual interest in the assets of a company after deducting its liabilities, representing the ownership's claim on assets.