Mitchell Operates a Diner in Pleasantville

question 142

Essay

Mitchell operates a diner in Pleasantville. Currently, the diner is not certified by the Pleasantville Restaurant Club. To get the diner certified, Mitchell would need to spend $20,000. Once certified, Mitchell expects to receive $5,000 in additional profits every year for perpetuity beginning 1 year from certification. What must Mitchell's discount rate be if he gets certified by the restaurant club?

---

Definitions:

Personal Selling Process

A series of steps taken by sales representatives to sell a product, including prospecting, approaching, presenting, handling objections, closing, and follow-up.

Personal Selling Process

A direct marketing approach that involves face-to-face interaction between a salesperson and a potential customer aimed at making a sale and building customer relationships.

Business Reply Card

A pre-addressed and prepaid postcard or form included with a mailing, allowing the recipient to respond easily to the sender.

Stimulus-Response Selling

A sales technique based on the premise that specific stimuli can elicit predictable responses from customers, guiding them towards a purchase.