Jeff's Website Design and Data Storage Deals Directly with Corporate

question 21

Multiple Choice

Jeff's Website Design and Data Storage deals directly with corporate customers online and builds websites and data storage to specifications after an order is placed.By reducing the firm's storage and carrying costs,this example illustrates that B2B firms can create

• A)greater efficiency in their operatoins.
• B)greater efficiency in their buying and selling
• C)synergies between buying and selling.
• D)market reach through e-commerce.

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Definitions:

Residual Income

The net income an entity generates above its cost of capital, a measure of profitability that calculates the surplus after accounting for the cost of capital.

Operating Income

This is the profit realized from a business's operations, after deducting operating expenses such as wages and cost of goods sold but before interest and taxes.

Acceptable Operating Income

The level of earnings from core operations deemed satisfactory by management, often in line with industry benchmarks or internal targets.

DuPont Formula

A method for analyzing components of return on equity to understand what factors are driving or affecting it.