The Marketing Manager of Pickacruise

question 9

Multiple Choice

The marketing manager of pickacruise.com (a travel Web site targeted at consumers who want a luxury vacation) finds that the firm can increase its market share and become the industry leader if it slashes prices by 50 percent during the month of December.However,the Vice President of the finance department is committed to reporting a 25 percent Return on Investment (ROI) at all times,which cannot be achieved if the firm slashes its prices.This conflict illustrates:

• A)a need to eliminate low-profit products.
• B)a lack of competition in the marketplace.
• C)how pricing operates in an ideal marketplace.
• D)the need for trade-offs in pricing objectives.

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Definitions:

Closing Entries

Journal entries made at the end of an accounting period to transfer the balances of temporary accounts to permanent ones, preparing the books for the next period.

Customer Refunds Payable

A liability account representing the amount of money owed by a company to customers for returned goods or cancelled services.

Net Income

The total profit of a company after all revenues and expenses, including taxes and interest, have been accounted for.

Statement Of Cash Flows

A summary of the cash receipts and cash payments for a specific period of time, such as a month or a year.