The Constant or Intercept Term in a Statistical Demand Study

question 14

Multiple Choice

The constant or intercept term in a statistical demand study represents the quantity demanded when all independent variables are equal to:

• A) 1.0
• B) their minimum values
• C) their average values
• D) 0.0
• E) none of the above

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Definitions:

Accounts Receivable Period

The accounts receivable period is the average number of days it takes for a company to collect payments owed by its customers after a sale has been made.

Expected Sales

The projected amount of sales that a company anticipates to achieve within a specific period.

Average Collection Period

The average number of days it takes a company to receive payment after a sale has been made.

Operating Cycle

The period between the acquisition of inventory and the collection of receivable generated from sales, reflecting how long it takes for a business to convert its inventory into cash.