OIL CHANGE MINI CASE: Mr

question 87

Multiple Choice

OIL CHANGE MINI CASE: Mr. Greasy is a national car care chain that specializes in providing routine services like oil changes and safety inspections. It advertises nationally, particularly around Memorial Day, Independence Day, and Labor Day, when it runs an advertising blitz to encourage drivers to bring their cars in for a check up before holiday road trips. Mr. Greasy's advertisements emphasize the importance of changing a car's oil regularly in order to prevent costly engine failure. Its stores are recognizable from the road by their gray and yellow color schemes. To encourage brand loyalty, Mr. Greasy offers customers reward cards that customers get stamped every time they get an oil change, and can receive the sixth oil change free after the purchase of the first five. Fast Oil, a North Carolina chain that offers the same kind of services, paints its stores black and yellow in an effort to appear like Mr. Greasy stores and benefit from Mr. Greasy's extensive advertising. Thus many customers have developed positive perceptions of Mr. Greasy, note Fast Oil's store color, and mistake Fast Oil stores for Mr. Greasy stores.
-In the OIL CHANGE MINI CASE, the Mr. Greasy Reward Card offers customers positive reinforcement on a ________ schedule.

• A) total
• B) variable ratio
• C) systematic
• D) continuous
• E) random

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Definitions:

Interest Burden

Relates to the impact of interest expenses on a company's net income, indicating the portion of profits consumed by interest obligations.

Return-On-Sales Ratio

A measure of a company's operational efficiency, calculated as operating income divided by net sales.

Leverage Ratio

A financial ratio indicating the level of debt incurred by a business entity against its assets or equity, showing the degree of leverage.

Market-To-Book Value

A ratio comparing a company's current market price to its book value, thereby indicating how much investors are willing to pay above or below the net asset value.