When a Company Sorts Prospects into Those with the Lowest

question 162

Multiple Choice

When a company sorts prospects into those with the lowest, medium, and highest profit potential, which segmentation approach is being used?

• A)Industry
• B)Size
• C)Usage
• D)Customer value

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Definitions:

Salvage Value

Salvage value is the estimated resale value of an asset at the end of its useful life.

Payback Period

This is the duration required to recoup the funds expended in an investment.

Simple Rate Of Return

The rate of return computed by dividing a project’s annual incremental net operating income by the initial investment required.

Straight-Line Method

A depreciation method that allocates an equal amount of depreciation each year over the asset's useful life.