Which of the following best describes a competitor with an ability to develop new products?
A) a serious long-term threat in a market
B) an aggressive competitor
C) a cooperative competitor
D) a possible short-term threat in a market
A
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The first step marketers should take when deciding how best to position their product is to
A. analyze competitors' positions. B. clearly define its competitive advantage. C. evaluate consumer feedback. D. define the product attributes that make it unique. E. determine what market segments will be interested in the product.
At an auction for the first time, Max bids on an object, believing that it is worth more than the price asked. When the item proves to be less valuable, Max is
A. liable on the bid. B. not liable on the bid because Max misestimated the value. C. not liable on the bid because the auctioneer misstated the value. D. not liable on the bid because the object was probably overpriced.
Assume that the economy is enjoying a strong boom, and as a result interest rates and money costs generally are relatively high. The WACC for two mutually exclusive projects that are being considered is 12%. Project S has an IRR of 20% while Project L's IRR is 15%. The projects have the same NPV at the 12% current WACC. However, you believe that the economy will soon fall into a mild recession, and money costs and thus your WACC will soon decline. You also think that the projects will not be funded until the WACC has decreased, and their cash flows will not be affected by the change in economic conditions. Under these conditions, which of the following statements is CORRECT?
A. You should reject both projects because they will both have negative NPVs under the new conditions. B. You should delay a decision until you have more information on the projects, even if this means that a competitor might come in and capture this market. C. You should recommend Project L, because at the new WACC it will have the higher NPV. D. You should recommend Project S, because at the new WACC it will have the higher NPV. E. You should recommend Project L because it will have both a higher IRR and a higher NPV under the new conditions.
Which of the following statements about the guaranteed purchase option is true?
A) An insured usually has 24 months to exercise an option. B) The option cannot be exercised until the insured reaches age 40. C) The amount of life insurance that can be purchased at each option is limited to 10 percent of the face amount of the basic policy. D) The additional coverage can be purchased without demonstrating insurability.