A Retailer, in Business for Over 50 Years, Has Developed

question 90

Multiple Choice

A retailer, in business for over 50 years, has developed the following regression model from the past 60 months of operating data:
Monthly sales dollars = $50,000 + $4.70A + $30B − $1,000X
Where:
A = number of customers
B = advertising dollars per month
X = 1 if a winter month
X = 0 if other months
An appropriate interpretation of this model is that:

• A) The business is seasonal, generating higher sales in winter months than other months.
• B) Advertising is not cost effective.
• C) Within the relevant range, each additional customer will make an average purchase of $4.70 per month.
• D) Sales are always expected to be at least $50,000.

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Definitions:

Personal Property

Movable assets owned by an individual, as opposed to real property like land or buildings.

Debtor

An individual or entity that owes money or is legally obligated to make payments to another party.

UCC

Stands for the Uniform Commercial Code, a comprehensive set of laws governing commercial transactions in the United States.

Default

Failure to make payments on a loan.