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

question 125

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%) .First, she classified DCI's credit customers into three categories by total assets (small, medium, and large) .Then, she randomly assigned four customers from each category to a sales discount rate.An analysis of Cindy's data yielded the following ANOVA table. $$\begin{array} { | c | c | c | c | c | } \hline \text { Source of Variation } & \text { SS } & \text { df } & \text { MS } & \text { F } \\\hline \text { Treatrnent } & 64.91667 & 3 & 21.63889 & 8.752809 \\\hline \text { Block } & 10.5 & 2 & 5.25 & 2.123596 \\\hline \text { Erer } & 14.83333 & 6 & 2.472222 & \\\hline \text { Total } & 90.25 & 11 & & \\\hline\end{array}$$ Using $\alpha$ = 0.05, the appropriate decision for treatment effects 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
• D)do not reject the null hypothesis \(\mu\) ₁ \(\neq\) \(\mu\) ₂ \(\neq\)\(\mu\) ₃ \(\neq\) \(\mu\) ₄
• E)do nothing

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Definitions:

Indirect Method

A approach used in cash flow statements to adjust net income for changes in non-cash accounts to determine net cash from operating activities.

Operating Activities

Operating activities include the primary revenue-generating activities of an organization as reflected in its cash flow.

Inventory Account

An account representing the total cost of all unsold goods held by a company, including raw materials, work-in-progress, and finished goods.

Depreciation Expense

The distribution of a physical asset's cost over its lifespan, which mirrors the reduction in its value as time progresses.