When General Motors Provides Payments or Price Reductions to Its

question 30

Multiple Choice

When General Motors provides payments or price reductions to its new car dealers as rewards for participating in advertising and sales support programs,it is granting a ________.

• A)trade discount
• B)functional discount
• C)captive product discount
• D)promotional allowance
• E)by-product allowance

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Definitions:

Amortized Loan

A loan with scheduled periodic payments that include both principal and interest.

Annuity

A financial product that pays out a fixed stream of payments to an individual, typically used as part of retirement planning.

Loan Payments

Loan payments are periodic payments made by a borrower to a lender, consisting of both principal and interest, to repay a loan.

Present Value

A concept in finance that calculates the current worth of a future sum of money or stream of cash flows given a specified rate of return.