When a Firm Begins to Charge High Fees for Additional

question 31

Multiple Choice

When a firm begins to charge high fees for additional services to non-profitable customers, it has determined that the __________ of those customers is too low to warrant added efforts at maintaining a relationship with them.

• A) client value
• B) lifetime value
• C) relational value
• D) market share
• E) 80/20 value

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Definitions:

Projected Sales

An estimation of future sales volume or revenue, often based on historical data and market analysis.

Budgetary Slack

The practice of underestimating revenues or overestimating costs when preparing a budget to create a buffer for unexpected situations.

Production Budgets

Financial plans that outline the expected production costs based on projected sales and inventory requirements.

Participatory Process

A decision-making approach that involves input and active involvement from all stakeholders or group members.