A two-way analysis of variance experiment is to be conducted to examine CEO salaries ($K) as a function of the number of years the CEO has been with the company and the size of the company’s sales. The years spent with the company are categorized into 0–3, 4–6, 7–9, and 9 years. The size of the company is categorized using sales ($million) per year into three categories: 0–50, 51–100, and 100.

a. Describe the factors associated with this experiment.

b. List the levels of each of the factors identified in part a.

c. List the treatment combinations of the experiment.

d. Indicate the components of the ANOVA table that will be used to explain the variation in the CEOs’

salaries.

e. Determine the degrees of freedom for each of the components in the ANOVA if two replications are used.