Which of the Following Observations Concerning Services Is True

question 56

Multiple Choice

Which of the following observations concerning services is true?

• A) It can be placed in inventory for use at another time.
• B) The customer owns services, and they can be used, resold, or given to others.
• C) Because of inseparability and high involvement on the part of the buyer, each service may be unique, with the quality likely to vary.
• D) It often involves an impersonal short-term relationship although in many instances relationship strength and duration are increasing.

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Definitions:

Cost of Capital

The desired return a corporation aims for in its investment activities to retain its market capitalization and lure in investments.

IRR

Internal Rate of Return; a financial metric used to evaluate the profitability of investments, indicating the annualized effective compounded return rate.

NPV

Net Present Value, a calculation to determine the value of a projected investment by subtracting the present value of cash outflows from the present value of cash inflows.

Equivalent Annual Annuity

A financial concept used to evaluate the annual return of an investment over its lifespan, making it easier to compare different investments.