A Business Using Price Lining Is Doing Which of the Following

question 107

Multiple Choice

A business using price lining is doing which of the following?

• A)trying to avoid the use of psychological pricing,which may be negatively received by customers
• B)trying to recoup its research and development costs for a new product
• C)attempting to attain a large market share before any competitors can enter the marketplace
• D)using price points to determine its pricing strategy
• E)engaging in potentially unethical pricing

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Definitions:

Average Operating Assets

The average value of the assets used in the normal operation of a business to generate revenue, calculated typically over a fiscal year.

Net Operating Income

A measure of a company's profitability by subtracting operating expenses from its operating revenues.

Minimum Required Rate

The lowest return on investment deemed acceptable by an investor or manager, often used in capital budgeting to evaluate potential projects.

Investment Opportunity

An asset or item that offers the potential for profit or income, either through capital appreciation or earnings.