The 80/20 Rule for Customer Profitability Refers to What

question 72

Multiple Choice

The 80/20 rule for customer profitability refers to what?

• A) That most of a firm's customers are likely to be high profit customers
• B) That most of a firm's efforts at retaining customers will be focused on a small group of customers
• C) That most of a firm's profits are generated from a relatively small group of customers
• D) That most of a firm's customers will complain about service at some point in time.

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Definitions:

Adjusted Basis

The adjusted basis is the original cost of an asset, altered for improvements, depreciation, and other adjustments.

Travel Expense Deduction

A tax deduction for expenses related to travel for business purposes, including transportation, lodging, and meals.

Self-Employment Tax

A tax consisting of Social Security and Medicare taxes primarily for individuals who work for themselves, calculated on net earnings from self-employment.

Net Earnings

The amount of money left after all deductions, including taxes and operating expenses, have been subtracted from total income.