Which of the Following Statements Is True Regarding the Affordable

question 44

Multiple Choice

Which of the following statements is true regarding the affordable method for setting a promotion budget?

• A) It is mostly used by large businesses.
• B) It completely ignores the effects of promotion on sales.
• C) It tends to place promotion first among spending priorities.
• D) It leads to a certain annual promotion budget.
• E) It almost always results in overspending.

---

Definitions:

Capital Balance

The amount of money that investors have contributed to a company plus retained earnings, less any withdrawals.

Fair Market Value

The price at which an asset would change hands between a willing buyer and a willing seller, neither being under any compulsion to buy or sell and both having reasonable knowledge of relevant facts.

Bonus

Additional compensation given to employees as a reward for their performance, typically cash or stock options.

Withdraws

Funds taken out from a business by the owner(s) for personal use, also known as drawings.