Scenario 11-2 The White Noise Recording Company Is Getting Ready to Release

question 29

Multiple Choice

Scenario 11-2
The White Noise recording company is getting ready to release the first compact disc from its newest band, Wet-Dog. Because White Noise's last three releases have been dismal failures, the company needs a quick influx of cash. The company has decided to use sales promotions to move the product through record stores and into customers' hands.
-(Scenario 11-2) White Noise commissions the building of point-of-purchase displays for record stores. The displays hold 144 compact discs, with headphones for patrons to listen to selections off each disc. This is known as

• A) a consumer-market sales promotion.
• B) an on-package sampling.
• C) an incentive.
• D) a trade-market sales promotion.

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Definitions:

Average Rate of Return

A financial ratio indicating the average annual return earned through an investment over its lifetime, expressed as a percentage of the initial investment cost.

Net Income

The total earnings of a company after subtracting all costs and expenses from revenue.

Net Cash Flow

The difference between a company's cash inflows and outflows over a period, indicating overall liquidity.

Compound Interest

Interest calculated on the initial principal and also on the accumulated interest of previous periods, leading to exponential growth of the investment or loan.