A Two-Factor Analysis of Variance Is Conducted to Test the Effect

question 58

Multiple Choice

A two-factor analysis of variance is conducted to test the effect the price and advertising have on sales of a particular brand of bottled water.Each week a combination of particular levels of price and advertising are used and the sales level is recorded.The computer results are shown below. Based on the results above,which of the following is correct?

• A)1 level of advertising and 2 levels of price were used.
• B)3 levels of adverting and 2 levels of price were used.
• C)2 levels of advertising and 3 levels of price were used.
• D)There were a total of 6 different treatments.

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Definitions:

Cash Flows

The sum of money flowing in and out of a company, particularly influencing its ability to cover short-term obligations.

Cost of Capital

The yield a business needs to generate from its project ventures to preserve its market valuation and draw in capital.

NPV

Net Present Value, a method used in capital budgeting to evaluate the profitability of an investment or project, by calculating the difference between the present value of cash inflows and outflows.

IRR

Internal Rate of Return, a metric used in capital budgeting to estimate the profitability of potential investments.