How Much of the Sales Performance Gap Is Due to Price

question 4

Multiple Choice

How much of the sales performance gap is due to price decline?

• A) 0.4 percent
• B) 2.5 percent
• C) 28.5 percent
• D) 37 percent
• E) 71.4 percent

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Definitions:

Discount Rate

The interest rate used to discount future cash flows of a financial instrument back to their present value, thus helping to determine the potential value of an investment.

Straight-Line Depreciation

A method of allocating an asset's cost evenly throughout its useful life.

MACRS

Modified Accelerated Cost Recovery System; a method of depreciation applied in the United States that allows businesses to recover investments in certain property over a specified life.

Opportunity Costs

The cost of forgoing the next best alternative when making a decision, representing the benefits that could have been received.