When does a marketer use reminder ads?
What will be an ideal response?
Reminder ads are important for mature products; they keep consumers thinking about the product.
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Paletta Corporation has provided the following information concerning a capital budgeting project: Investment required in equipment$280,000 Expected life of the project 4 Salvage value of equipment$0 Annual sales$660,000 Annual cash operating expenses$470,000 One-time renovation expense in year 3$80,000 The company's income tax rate is 30% and its after-tax discount rate is 7%. The company uses straight-line depreciation on all equipment. Assume cash flows occur at the end of the year except for the initial investments. The company takes income taxes into account in its capital budgeting.The total cash flow net of income taxes in year 3 is:
A. $98,000 B. $74,000 C. $154,000 D. $110,000
Which of the following statements is CORRECT?
A. If a 10-year, $1,000 par, 10% coupon bond were issued at par, and if interest rates then dropped to the point where rd = YTM = 5%, we could be sure that the bond would sell at a premium above its $1,000 par value. B. Other things held constant, a corporation would rather issue noncallable bonds than callable bonds. C. Other things held constant, a callable bond would have a lower required rate of return than a noncallable bond. D. Reinvestment rate risk is worse from an investor's standpoint than interest rate price risk if the investor has a short investment time horizon. E. If a 10-year, $1,000 par, zero coupon bond were issued at a price that gave investors a 10% yield to maturity, and if interest rates then dropped to the point where rd = YTM = 5%, the bond would sell at a premium over its $1,000 par value.
Assuming that the number of units produced is greater than the number of units sold, which of the following statements is true when comparing net operating income using absorption and variable costing?
A) Absorption costing will yield a higher net operating income. B) Variable costing will yield a higher net operating income. C) Net operating income will be the same under both methods. D) Sales revenue will be less using absorption costing.
Which of the following does NOT normally influence a firm's dividend policy decision?
A. The firm's ability to accelerate or delay investment projects without adverse consequences. B. A strong preference by most of its shareholders for current cash income versus potential future capital gains. C. Constraints imposed by the firm's bond indenture. D. The fact that much of the firm's equipment is leased rather than bought and owned. E. The fact that Congress is considering changes in the tax law regarding the taxation of dividends versus capital gains.