Suppliers Can Gain Power from a Number of Sources in the Buyer

question 114

Multiple Choice

Suppliers can gain power from a number of sources in the buyer / supplier relationship. When a buyer can threaten to cancel future business unless the supplier adheres to the buyer's demands, this is called a ________ source of power.

• A) legal
• B) reward
• C) referent
• D) coercive

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Definitions:

Present Value

The current value of a future sum of money or stream of cash flows, discounted at a specified rate of return.

Present Value

The current worth of a future sum of money or stream of cash flows, given a specified rate of return or discount rate.

Discounting

The process of determining the present value of future cash flows by applying a discount rate.

Compounding

The process in which the value of an investment increases because the earnings on an investment, both capital, and interest, earn interest as time passes.