Which of the Following Is an Advantage of Using Test

question 35

Multiple Choice

Which of the following is an advantage of using test marketing?

• A) It is the most economical market testing method for a new product.
• B) It provides the best sales forecast and the best evaluation of alternative marketing strategies.
• C) It reduces the risk for test marketers because its forecasts are highly projectable.
• D) It is the most reliable method because it helps maintain confidentiality more than any other test methods.

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Definitions:

After-Tax Interest Expense

The cost of borrowing after adjusting for the effects of taxes, calculated by subtracting the tax savings from the total interest expense.

Basic Earnings Per Share

A measure of a company's profitability that divides net income by the number of outstanding common shares.

Noncontrolling Interest

The share of equity in a subsidiary not held by the parent company, reflecting the interest that is not controlled by the majority shareholder.

Stockholders' Equity

The residual assets of a company that belong to the shareholders after all liabilities have been deducted; also known as shareholders' equity.