Andy Will Not Purchase a Computer Unless the Manufacturer Offers

question 122

Multiple Choice

Andy will not purchase a computer unless the manufacturer offers a rebate. This is an example of which of the following problems associated with refund and rebate programs?

• A) fraud and misredemption
• B) costs
• C) paperwork to process the refund or rebate
• D) diminished effectiveness

---

Definitions:

Return On Investment

A performance measure used to evaluate the efficiency or profitability of an investment or compare the efficiency of several different investments.

Investment Turnover

A measure of the efficiency of an entity in generating revenue from its investments, often calculated as sales divided by the average investment.

Activity Base

An activity base is a measure used in managerial accounting to allocate costs, based on activities that drive costs, as part of activity-based costing (ABC).

Service Departments

Departments within a company that support the primary operations but don't directly generate revenue.