Why Would a Discount Store Have a Lower Gross Margin

question 68

Multiple Choice

Why would a discount store have a lower gross margin percent than a jewelry store?

• A) Discount stores are only beginning to explore gross margin in pricing decisions.
• B) Jewelry stores cannot offer the variety that discount stores offer.
• C) Discount stores traditionally do not profit as well as jewelry stores.
• D) Discount stores have a lower priced merchandise strategy.
• E) Discount stores have a higher cost of goods sold.

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Definitions:

Bonds

Fixed income investment products that represent loans made by an investor to a borrower, typically corporate or governmental.

Effective Interest Method

A technique used in accounting for amortizing the cost of a bond premium or discount over the life of the bond in a way that results in a constant rate of interest over the period.

Issuance

The process by which a company offers new or existing securities for sale to investors, including stocks or bonds, to raise capital.