In Recent Years, Amazon Has Lowered Its Profits by Offering

question 135

Multiple Choice

In recent years, Amazon has lowered its profits by offering some of its customers free shipping on books and building more warehouses to hold its book inventories.Which of the following explains Amazons actions?

• A)Amazon feared government regulation if its profits were too high.
• B)Amazon took these actions to deter entry into its market by new online booksellers.
• C)Amazon took these actions to compete more effectively with existing online booksellers.
• D)Amazon was forced to take these actions because of the bargaining power of its suppliers.

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Definitions:

Net Operating Income

A company's income after all operating expenses, excluding the effects of interest and taxes, have been deducted from total revenues.

Planning Budget

A budget prepared before the period begins, based on projected levels of activity; acts as a guideline for income, expenses, and financial goals.

Spending Variance

A measure indicating the disparity between what was anticipated to be spent and what was actually expended in financial terms.

Employee Salaries

The monetary compensation paid to employees for their labor, typically on a monthly or yearly basis.