A Pricing Strategy Where the Buyer Is Allowed to Deduct

question 276

Multiple Choice

A pricing strategy where the buyer is allowed to deduct freight expenses from the list price of the goods so the seller pays the transportation costs is referred to as

• A) FOB factory pricing.
• B) FOB absorption pricing.
• C) FOB origin pricing.
• D) basing-point pricing.
• E) FOB with freight-allowed pricing.

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Definitions:

Appreciation

An increase in the value of a currency in terms of other currencies.

Euro

The official currency used by 19 of the 27 European Union countries, also known as the eurozone.

Dollar

A currency unit used by the United States and other countries, represented by the symbol $, and used as a standard monetary unit in international transactions.

Exchange Rate

The price of one currency in terms of another currency, which determines how much foreign currency one can buy with a unit of domestic currency.