Customer Relationship Management (CRM) Helps Firms Gain and Maintain Competitive

question 8

Multiple Choice

Customer relationship management (CRM) helps firms gain and maintain competitive advantage by:

• A) encouraging them to produce standardized goods.
• B) merging all demographic-based and behavior-based segments of markets.
• C) studying which goods and services are purchased together.
• D) prohibiting them from bundling goods and services together.

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Definitions:

Capital Rationing

Occurs when investors or management place a constraint on the size of the firm’s capital budget during a particular period.

Accounting Rate of Return

A financial ratio that measures the profitability of an investment by dividing the average annual profit by the initial investment cost.

Weighted Average Cost of Capital

The average rate of return a company is expected to pay its security holders to finance its assets, weighted by the type of capital.

Modified Internal Rate of Return (MIRR)

A financial metric that accounts for the cost of capital and reinvestment of cash flows to provide a better measure of a project's profitability than the traditional IRR.