Pricing is an important, but complex and difficult task. Define optimum price and briefly describe the four key factors for determining an optimum price.
What will be an ideal response?
Optimum price is the highest price that will produce your desired level of sales in your intended market. Your fundamental goal as an entrepreneur should be setting the optimum price. There are four key factors for determining an optimum price:
1. Demand for the product or service. Where demand is high, you can charge a premium. Where it is low, you need to consider lowering prices to keep cash flowing into the business.
2. Value delivered to the customer. You can buy hair-coloring kits at the supermarket for $8.00, and a single use of professional products would not cost more, but having a professional do the job with professional products and expertise can easily cost 10 times as much - and many people gladly pay it.
3. Prices set by competing firms. If a liter of Coke costs a dollar, few are likely to pay $2 for a liter of Pepsi.
4. Your business strategy and product placement. A company that prides itself on an environmentally conscious approach to manufacturing probably would not choose to use cheaper, unrecycled components, even if it helped profits.
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Which of the following is not a true statement regarding SFAS No. 8?
a. SFAS was faithful to the historical cost accounting model, but from an economic viewpoint, it produced illogical results. b. SFAS No. 8 required the temporal method of translation. c. In empirical studies made of the economic impact of SFAS No. 8 on American multinational enterprises, only foreign exchange risk and management policies regarding hedging of foreign currency exposures were found to have any possible impact. d. SFAS No. 8 was consistent with the foreign currency orientation.
Organizations aiming to become inclusive need to engage in a continuous _______________ stage process:
a. Four b. Two c. Ten d. Three
Bookie Bill runs an illegal sports gambling operation. Sam pays Bookie Bill $500 for bets on the weekend's college football games. All of Sam's selected teams win, and, under the terms of his agreement with Bookie Bill, should be paid $5,000 in winnings. When Bookie Bill refused to pay Sam the gambling winning, Sam sued. Will the court order Bookie Bill to pay Sam? Why or why not?
What will be an ideal response?
Match each of the following terms with the appropriate definitions.
A. A bank authorized to accept deposits of amounts payable to the federal government, including payroll taxes. B. A special bank account used solely for paying employees; each pay period an amount equal to the total employees' net pay is deposited and the employees' payroll checks are drawn on that account. C. A record for a pay period that shows the pay period dates, regular and overtime hours worked, gross pay, net pay and deductions. D. A seller's obligation to replace or correct a product or service that fails to perform as expected within a specified period. E. Total compensation earned by an employee. F. Obligations due within one year or the company's operating cycle, whichever is longer. G. A calculation of a company's risk of its ability to pay interest when due. H. Compensation provided to employees beyond salaries and wages, such as premiums for medical insurance and contributions to pension plans. I. Payments of income taxes that are deferred until future years because of temporary differences between GAAP and tax accounting rules. J. A written promise to pay a specified amount on a definite future date within one year or the company's operating cycle, whichever is longer.