Which of the following is a disadvantage of couponing?
A. It assists only in attracting new customers but does not help in retaining existing customers.
B. It discourages initial product trial.
C. It can be difficult to estimate how many consumers will use a coupon and when.
D. It assists in reducing the price of a product only by relying on retailers for cooperation.
E. It may encourage regular users to trade down to inexpensive brands.
Answer: C
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The cash budget is not the same as the pro forma cash flow statement.
Answer the following statement true (T) or false (F)
During August, Boxer Company sells $358,000 in merchandise that has a one year warranty. Experience shows that warranty expenses average about 5% of the selling price. The warranty liability account has a credit balance of $12,600 before adjustment. Customers returned merchandise for warranty repairs during the month that used $9200 in parts for repairs. The entry to record the estimated warranty expense for the month is:
A. Debit Estimated Warranty Liability $17,900; credit Warranty Expense $17,900. B. Debit Estimated Warranty Liability $9200; credit Warranty Expense $9200. C. Debit Warranty Expense $14,500; credit Estimated Warranty Liability $14,500. D. Debit Warranty Expense $5300; credit Estimated Warranty Liability $5300. E. Debit Warranty Expense $17,900; credit Estimated Warranty Liability $17,900.
Firms account for leases using either the operating lease method or the capital (finance) lease method. Which of the following is not true?
a. The capital, or finance, lease method treats leases equivalent to installment purchases or sales, where the lessee borrows funds from the lessor to purchase the asset and the lessor recognizes profit at the time of sale. b. The lessee records the leased asset and the lease liability on the balance sheet at the present value of the contractual cash flows at the time of signing the lease. c. The lessee amortizes the leased asset, similar to recognizing depreciation on buildings and equipment. d. The lessee recognizes interest expense on the lease liability, similar to recognizing interest expense on long-term notes or bonds. e. The lessor records the signing of a capital lease differently than if the lessor sold the leased asset for an installment note receivable.
Answer the following statements true (T) or false (F)
1. In general, more sophisticated audiences and those already familiar with the workings of a business will appreciate dramatic visual aids. 2. The most common reason that managers write reports is that someone asked them to. 3. Actually writing the report takes more time than doing the preliminary groundwork. 4. A report writer should gather data before developing solutions or action items.