The Business Model in Which a Company Sells Products, Such

question 24

Multiple Choice

The business model in which a company sells products, such as razors, at break-even pricing in order to sell higher-margin products, such as razor blades, is called the

• A) time model.
• B) multi-component system.
• C) customer solutions model.
• D) switchboard model.
• E) efficiency model.

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Definitions:

Required Rate of Return

The required rate of return is the minimum annual percentage earned by an investment that will induce individuals or companies to put money into a particular security or project.

Put Option

A financial contract giving the buyer the right, but not the obligation, to sell a specified amount of an underlying asset at a set price within a specified time.

Striking Price

The predetermined price at which the holder of an option can buy or sell the underlying security.

Cumulative Feature

A characteristic of certain preferred stocks or securities where unpaid dividends accumulate and must be paid before dividends to common stockholders.