Lancôme is a manufacturer of fine perfumes. It offers to share the costs (up to 5 percent of the amount of products purchased by the retailer) of advertising with any retailer that carries its line of fragrances. This is an illustration of:
A. specialty promotion
B. cooperative advertising
C. comparative advertising
D. shared advertising
E. advertising advocacy
Answer: B
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Which of the following statements regarding the modular approach is false?
a. It is also referred to as the phased approach. b. It can be combined with the parallel or the direct approach. c. It is always a faster approach than parallel. d. It can combine the safety and control of a parallel implementation with cost/time savings of the direct approach.
The use of poor quality raw materials resulting in more time spent in production will result in:
a. unfavorable direct labor efficiency variance. b. unfavorable variable overhead efficiency variance. c. unfavorable direct labor rate variance. d. unfavorable fixed overhead efficiency variance.
As we waive the conditions of perfect capital markets and include taxes, M&M suggest that the average cost of capital for the firm will remain unchanged with the addition of debt
Indicate whether the statement is true or false
Parent Corporation purchases a machine (a five-year property) for $20,000. It claims $4,000 of depreciation under the MACRS rules in the first year it owns the property. At the close of business on the last day of the first year, Parent sells the machine to a 100%-owned corporation (Subsidiary) for $18,000. Subsidiary immediately commences depreciating the machine as a five-year property using
the regular MACRS rules. What depreciation can be claimed by Subsidiary Corporation in the first year it uses the machine? What will be an ideal response?