Which of the Following Statements Is Not True Concerning a Service

question 9

Multiple Choice

Which of the following statements is not true concerning a service guarantee?

• A) A well designed and implemented service guarantee can help a firm gain control over its operation.
• B) Fear of customer cheating inhibits some mangers from adopting a service guarantee.
• C) Managers are likely to worry about the costs of a service guarantee, but for the wrong reasons.
• D) Managers who seek control over the financial consequences of a service guarantee should require customers to meet various conditions.

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Definitions:

Formal Instrument of Credit

A written document that acknowledges debt and specifies the terms under which it will be repaid.

Note Receivable

Note receivable is a financial asset representing a written promise to receive a specific amount of money, plus interest, by a certain date.

Notes Receivable

A claim or right to receive a determinable sum of money from another party as evidenced by a promissory note.

Interest

The cost of borrowing money or the return on invested funds, generally expressed as a percentage rate over a period of time.