A Business Hoping to Generate Large Online Sales Through Posting

question 60

Multiple Choice

A business hoping to generate large online sales through posting ads on social networking sites, but only pay when an ad actually generates a sale, should use a performance measure of

• A)a "negotiated measure," and pay $100 to post their ad for two weeks.
• B)"cost per click," and pay $0.50 for every visitor who clicks on the ad and goes to their website.
• C)"cost per action," and pay $50 for every purchase that originated from an ad on the site.
• D)"cost per thousand," and pay $0.50 for every time an ad loads, up to $100 per month.

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Definitions:

Lease Agreement

A contract in which one party, the lessor, allows another party, the lessee, to use an asset for a specified period of time in exchange for payments.

Finance Lease Agreement

A lease in which the lessee has control over the asset being leased and substantially all risks and rewards incidental to ownership, even though legal title may not be transferred.

Residual Value

The estimated amount that an entity would currently obtain from disposal of the asset, after deducting the estimated costs of disposal, if the asset were already of the age and in the condition expected at the end of its useful life.

Implicit Interest Rate

An interest rate inferred from the cost of borrowing, or the return on investment, that is not explicitly stated.