What Is the Main Reason That a Business Suffers Several

question 32

Multiple Choice

What is the main reason that a business suffers several economic consequences when a dissatisfied customer leaves?

• A)The cost of attracting a new customer is greater than retaining a current customer.
• B)The business's competitors enjoy a greater customer loyalty toward the same type of products.
• C)The amount of money spent on developing the product for the dissatisfied customer cannot be reimbursed.
• D)The business has to pay a large compensation fee to the customer.
• E)The future costs for the development of a similar product increases abruptly.

---

Definitions:

Discount Factor

A multiplier used in discounted cash flow analysis to present value future cash flows.

Discount Rate

In finance, the interest rate used to discount future cash flows to their present value, often reflecting the risk or time value of money.

Opportunity Cost

The cost of missing out on the next best alternative when making a decision.

Present Value

The current value of a future sum of money or stream of cash flows, given a specified rate of return.