The Goal of Factor Analysis Is to Reduce a Large

question 66

Multiple Choice

The goal of factor analysis is to reduce a large number of variables to as few dimensions or constructs as possible. This is known as:

• A) prudence.
• B) munificence.
• C) parsimony.
• D) summation.

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Definitions:

Variable Costs

Costs that fluctuate in direct proportion to changes in levels of production or sales volumes.

Fixed Costs

Financial obligations like rent, wages, and insurance that are stable and do not vary with the level of goods manufactured or sold.

Break-even

The point at which total revenues equal total costs, resulting in neither profit nor loss for the business.

Margin of Safety

The difference between actual or projected sales and the break-even point. It indicates the amount of sales decline a business can endure before it starts incurring losses.