What Type of Pricing Strategy Is Used in a Situation

question 3

Multiple Choice

What type of pricing strategy is used in a situation where the seller has an ethical responsibility not to overcharge the client and the fees do not relate directly to the time and/or effort spent in specific cases?

• A) Price lining
• B) Prestige pricing
• C) Professional pricing
• D) Customary pricing
• E) Price skimming

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Definitions:

Cash Coverage Ratio

A financial metric that measures a company's ability to cover its interest obligations with its cash flow.

Depreciation Expense

Segmenting the financial outlay of a physical asset across its period of service.

EBIT

A financial performance indicator, earnings before interest and taxes, which omits the costs related to interest and income taxes.

Times Interest Earned

A financial metric that compares a company's income before interest and taxes to its interest expenses, indicating ability to meet interest obligations.