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A New Salesperson Takes a Prospective Client Out for Lunch

question 29

Multiple Choice

A new salesperson takes a prospective client out for lunch. When the salesperson got back to the office and was telling his colleagues of the successful meeting, they were shocked to hear what the salesperson did. The salesperson likely was not familiar with which of the following?


Definitions:

Crossover Rate

The crossover rate is the rate of return at which two projects have the same net present value (NPV), used in capital budgeting to compare the desirability of investments or projects.

Profitability Index

A financial tool used to evaluate the attractiveness of an investment by dividing the present value of future cash flows by the initial investment cost.

Rate Of Return

The gain or loss of an investment over a specified period, expressed as a percentage of the investment’s cost.

Required Return

The lowest profit anticipated by an investor from a specific asset or project investment.

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