To Encourage Performance, Loyalty, and Continuing Education, the Human Resources

question 4

Multiple Choice

To encourage performance, loyalty, and continuing education, the human resources department at a large company wants to develop a regression-based compensation model for mid-level managers based on three variables: business unit-profitability in $1,000s (Profit) , years with company (Years) , and a dummy variable (Grad) which takes on 1 when the individual holds a graduate degree in a relevant field and 0 otherwise. Data have been collected for 36 managers. The sample regression equation is = - 13,264.3 + 14.13Profit + 1,868.53Years + 45,121.94Grad - 0.1539Profit × Grad - 198.34 Years × Grad. Which of the following is the predicted value of Compensation for a manager having 15 years with the company, a graduate degree, and a business-unit profit of $4,800,000?

• A) $121,492.60
• B) $108,324.80
• C) $101,749.70
• D) $112,101.60

---

Definitions:

Notes Payable

Written promises to pay a specified amount of money, typically with interest, by a certain date.

Maturity Value

The total amount that will be paid to the investor at the end of a fixed income security's term, including principal and interest.

Interest Expense

The cost incurred by an entity for borrowed funds, typically paid at a set rate over the life of the borrowing.

Notes Payable

Liabilities represented by written promises to pay a specified sum of money, usually with interest, by a certain date.