The sales force for Ramon Tool Corp. has been instructed to offer a 10 percent discount to its retailers on all units ordered in excess of the previous month's order amount. The offer will be extended to Ramon's independent retailers, applicable to several small hardware lines. The objective of this type of sales promotion is to:
A. build up reseller inventories.
B. increase traffic in retail stores.
C. improve shelf space and displays.
D. reinforce advertising.
E. encourage trial purchases of a new product.
Answer: A
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A high detection risk strategy includes all of the following except:
A. heavy reliance on analytical procedures as substantive procedures. B. audit work only completed at year-end. C. interim testing. D. reduced testing of transactions.
Answer the following statements true (T) or false (F)
1. Corporations may not retire preferred stock in order to avoid paying the preferred dividends. 2. A profitable corporation may make distributions to stockholders in the form of bonuses. 3. Dividends can be paid in the form of cash, stock, or other property. 4. Cash dividends cause a decrease in both assets and stockholders' equity of the corporation. 5. The declaration of a cash dividend does not create an obligation for the corporation.
In the context of building wealth for retirement, which of the following statements is true of a traditionalindividual retirement account (IRA)?
A. A person has the right to make the decision about how much to invest subject to maximum allowable contributions. B. A person can put his or her IRA money only into government securities and mutual funds. C. A person need not pay taxes on the money received from a traditional IRA when he or she begins making withdrawals. D. The contributions a person makes to a traditional IRA are not tax deductible at the time he or she makes them.
Sweetums Inc, a confectioner best known for its mint ogre balls, uses the residual dividend model to set its dividends. Selected financial information for Sweetums Inc is provided in the table below
Given the investment plan summarized in the table, how much new debt will it have to take on in order to maintain its target capital structure? Selected Financial Information Sweetums Inc Net income $90 million Equity capital structure weight 0.60 Investments $100 million Dividends $0.30 per share A) $30 million B) $40 million C) $60 million D) $90 million E) $100 million