Refer to the Passage Below to Answer the Questions That

question 64

Multiple Choice

Refer to the passage below to answer the questions that follow.
Everyone knows McDonald's, the worldwide fast food chain. McDonald's has used consumer promotions for years. Restaurants offer a kids' Happy Meal that always includes a toy, and often times the package itself is a promotion, such as pumpkin buckets at Halloween. McDonald's has also used a promotion patterned after the popular Monopoly game, in which everyone wins something small, like a soft drink or french fries, but one participant could win $1 million dollars. The Monopoly promotion usually lasts several months. McDonald's also participates in promotions with movies, such as Star Wars and several Disney movies. Another promotion McDonald's is considering is a program that will give consumers one free Happy Meal for every 10 they purchase.
-What type of partnership program does McDonald's enter into when its promotions are related to movies?

• A)co-marketing
• B)co-branding
• C)specialty
• D)tie-in
• E)loyalty program

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Definitions:

Loss On Redemption

The financial loss incurred when a debt instrument, such as a bond, is repaid before its maturity date.

Effective-Interest Method

A method of calculating the amortized cost of a bond and the amount of interest expense over its relevant period.

Amortization

The process of spreading out the cost of an intangible asset over its useful life or the repayment of loan principal over time.

Interest Expense

The cost incurred by an entity for borrowed funds over a period, reflected in its income statement.