Which of the Following Statements Regarding Customer Defection Is NOT

question 27

Multiple Choice

Which of the following statements regarding customer defection is NOT true?

• A) Defection rates are determined by customer loyalty.
• B) The longer a company retains a customer, the greater is the volume of customer-generated unit sales.
• C) Lowering customer defection rates creates a higher cost structure.
• D) The longer a company retains a customer, the higher the average unit cost of each sale.
• E) There is a positive relationship between the length of time that a customer stays with a company and profit per customer.

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Definitions:

Fair Value

An estimate of the market value of an asset or liability, based on current prices in an active market or through valuation techniques.

Corporate Existence

The legal status that allows a company to operate as a distinct entity, enabling it to buy, sell, own assets, and incur liabilities.

Common Stock

A type of equity security that represents ownership in a corporation, giving holders the right to vote on corporate matters and receive dividends.