SCENARIO 18-12
the Marketing Manager for a Nationally Franchised Lawn $\beta$

question 203

True/False

SCENARIO 18-12
The marketing manager for a nationally franchised lawn service company would like to study the characteristics that differentiate home owners who do and do not have a lawn service. A random sample of 30 home owners located in a suburban area near a large city was selected; 15 did not have a lawn service (code 0) and 15 had a lawn service (code 1). Additional information available concerning these 30 home owners includes family income (Income, in thousands of dollars), lawn size (Lawn Size, in thousands of square feet), attitude toward outdoor recreational activities (Attitude 0 = unfavorable, 1 = favorable), number of teenagers in the household (Teenager), and age of the head of the household (Age). The Minitab output is given below:

-Referring to Scenario 18-10 Model 1,the null hypothesis
H₀ : $\beta$ ₁ = $\beta$ ₂ = $\beta$ ₃ = $\beta$ ₄ = $\beta$ ₅ = $\beta$ ₆ = 0 implies that the number of weeks a worker is unemployed due to a layoff is not related to one of the explanatory variables.

---

Definitions:

WACC

Weighted Average Cost of Capital; a calculation of a firm's cost of capital in which each category of capital (debt, equity) is proportionately weighted.

Capital Component

Individual sources of funding that make up a company's capital structure, including debt and equity.

Accounts Payable

Accounts Payable is the account showing the amount a company owes to suppliers or vendors for goods or services purchased on credit.

Target Capital Structure

The optimal mix of debt, equity, and other financing sources that a company aims to maintain to fund its operations and growth.