Percy Productions Has Three Models: D, E, and F

question 35

Multiple Choice

Percy Productions has three models: D, E, and F. The following information is available: Percy Productions is thinking of discontinuing model F because it is reporting an operating loss. All fixed expenses are unavoidable. Assuming Percy Productions discontinues model F and does not replace it, what effect will this have on operating income?

• A)Decrease $13,000
• B)Increase $13,000
• C)Increase $7000
• D)Decrease $7000

---

Definitions:

Two-way ANOVA

A statistical test used to determine the effect of two nominal predictor variables on a continuous outcome variable, allowing for interactions between the factors to be analyzed.

Interaction Effect

The impact that the combination of variables has on a dependent variable, which is different from the effect of any single variable.

Two-way ANOVA

A statistical procedure for investigating the effect of two categorical predictors on a continuous outcome.

Profile Plots

A graphical tool for exploring the interaction effects in a multivariate analysis, particularly applicable in the visualization of interactions between factors in factorial experiments.