An Insurance Company Is Considering Using Independent Sales Agents Who

question 287

Multiple Choice

An insurance company is considering using independent sales agents who would receive a 7 percent sales commission on sales or its own insurance salespeople who would receive a 5 percent commission, salaries, and benefits. Additionally, with a company salesforce, sales administration costs would be incurred for a total fixed cost of $650,000 per year. At what level of sales would independent salespeople be less costly to the firm?

• A) $650,000
• B) $3,250,000
• C) $6,500,000
• D) $32,500,000
• E) $35,200,000

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Definitions:

Injury Site

The location on the body where an injury has occurred.

Platelets

Small, disc-shaped cell fragments in the blood that are essential for blood clotting and repair of damaged blood vessels.

Costimulation

A process in immunology where an additional signal provided by one immune cell enhances the activation or survival of another, leading to an effective immune response.

Immune Response

The immune response is the body's defensive reaction to substances or organisms that are identified as foreign or harmful.