Yvonne Lang, VP of Finance at Digital Components, Inc

Multiple Choice

Yvonne Lang, VP of Finance at Digital Components, Inc.(DCI) , wants a regression model which predicts the average collection period on credit sales.Her data set includes two qualitative variables: sales discount rates (0%, 2%, 4%, and 6%) , and total assets of credit customers (small, medium, and large) .The number of dummy variables needed for "sales discount rate" in Yvonne's regression model is ___.

A) 1
B) 2
C) 3
D) 4
E) 7