_____ Simply Adds a Mark-Up to the Cost of the Goods

question 20

Multiple Choice

_____ simply adds a mark-up to the cost of the goods.

• A)Demand-based pricing
• B)Negotiated pricing
• C)Cost-based pricing
• D)Markup-based pricing
• E)Target return pricing

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Definitions:

Rule Of 72

A simple formula used to estimate the number of years required to double the invested money at a given annual rate of return, by dividing 72 by the expected rate of interest.

Compounding

Compounding refers to the process by which the value of an investment increases because the earnings on an investment, both capital gains, and interest, earn interest as time passes.

Compounded Monthly

A process where interest earned on an investment is calculated and added to the principal each month, thereby earning interest in subsequent months.

Opportunity Rate

The return of a foregone option when another investment is chosen, embodying the concept of opportunity cost.