Yvonne Lang, VP of Finance at Digital Components, Inc

question 58

Multiple Choice

Yvonne Lang, VP of Finance at Digital Components, Inc.(DCI) , wants a regression model which predicts the average collection period on credit sales.Her data set includes two qualitative variables: sales discount rates (0%, 2%, 4%, and 6%) , and total assets of credit customers (small, medium, and large) .The number of dummy variables needed for "total assets of credit customer" in Yvonne's regression model is ___.

• A)1
• B)2
• C)3
• D)4
• E)7

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Definitions:

Income Statement

A financial statement that shows a company's revenues, expenses, and net income over a specific period, illustrating its financial performance.

Total Asset Turnover

A financial ratio that measures a company's efficiency in using its assets to generate revenue.

Balance Sheet

A snapshot report of a company's assets, liabilities, and shareholder equity at a specific time.

Income Statement

A financial statement that shows a company's revenues, expenses, and profits or losses over a specific period.