Which of the Following Statements Describes a Problem with Demand-Based

question 40

Multiple Choice

Which of the following statements describes a problem with demand-based pricing for services?

• A) Prices may not reflect customer value
• B) Costs are difficult to trace
• C) Heterogeneity of services limits comparability
• D) Monetary price must be adjusted to reflect the value of non-monetary costs
• E) Labor is more difficult to price than materials

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Definitions:

Cash Inflows

Money received by a business from its operations, investments, or financing activities.

Discount Factor

A multiplier used to calculate the present value of future cash flows; reflects the time value of money.

Invested Today

Refers to the allocation of resources, such as capital or time, in the present with the expectation of future returns.

Guaranteed Rate

An interest rate or return that is promised by a lender or issuer to an investor for a fixed period.