The appliance salesperson asked the prospect, "What do you like best about the competitor's washing machines?" "Do you think you have ever paid too much for a new washer?" "Are you happy with how well your current washer cleans your clothes?" The salesperson, in this case, has used:
A. objection refutation.
B. discriminators.
C. encoding questions.
D. probing.
E. channel narrowing.
Answer: D
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Sally files a lawsuit against Jim in a Tennessee court. Jim does not live in Tennessee and has never been to the state. The Tennessee court may not decide the case unless it can demonstrate that Jim somehow has a close connection with the state.
Answer the following statement true (T) or false (F)
________ refers to a business buying situation in which the buyer purchases a product or service for the first time
A) Modified rebuy B) Straight rebuy C) New task D) Reverse auction E) Derived demand
A ________ refers to an alteration or a modification of a product by a party in the chain of distribution that absolves all prior sellers from strict liability.
A. res ipsa loquitur B. negligence per se C. proximate cause D. supervening event
Cranberry Corp. has two divisions of equal size: a computer manufacturing division and a data processing division. Its CFO believes that stand-alone data processor companies typically have a WACC of 8%, while stand-alone computer manufacturers typically have a 12% WACC. He also believes that the data processing and manufacturing divisions have the same risk as their typical peers. Consequently, he estimates that the composite, or corporate, WACC is 10%. A consultant has suggested using an 8% hurdle rate for the data processing division and a 12% hurdle rate for the manufacturing division. However, the CFO disagrees, and he has assigned a 10% WACC to all projects in both divisions. Which of the following statements is CORRECT?
A. While the decision to use just one WACC will result in its accepting more projects in the manufacturing division and fewer projects in its data processing division than if it followed the consultant's recommendation, this should not affect the firm's intrinsic value. B. The decision not to adjust for risk means, in effect, that it is favoring the data processing division. Therefore, that division is likely to become a larger part of the consolidated company over time. C. The decision not to adjust for risk means that the company will accept too many projects in the manufacturing division and too few in the data processing division. This will lead to a reduction in the firm's intrinsic value over time. D. The decision not to risk adjust means that the company will accept too many projects in the data processing business and too few projects in the manufacturing business. This will lead to a reduction in its intrinsic value over time. E. The decision not to risk adjust means that the company will accept too many projects in the manufacturing business and too few projects in the data processing business. This may affect the firm's capital structure but it will not affect its intrinsic value.