Butler Automotive Developed a New Diagnostic Testing Procedure That Is

question 72

Multiple Choice

Butler Automotive developed a new diagnostic testing procedure that is expected to increase sales by $10,000 per month.As more drivers bring in their vehicles,Butler expects to also do more oil changes and brake repairs.As a result,inventory levels of oil and brake parts must be increased by $5,000.Revenues from oil changes and brake jobs are expected to increase by $4,000 per month.An example of an increase in net working capital requirements from the new diagnostic testing procedure is the

• A) increase in inventory levels of oil and brake parts of $5,000.
• B) increase in revenue of $10,000 per month for the diagnostic testing.
• C) increase in revenues from oil changes and brake jobs of $4,000 per month.
• D) increase in all activities totaling $19,000 per month.

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Definitions:

Loyalty Programs

Marketing strategies designed to encourage customers to continue to shop at or use the services of a business associated with each program.

Reciprocity

Reciprocity is a mutual exchange of privileges or interactions between two parties where each offers something in return.

Misrepresentation

The act of giving a false or misleading account of the nature of something, often to deceive or mislead.

Hire-Purchase Agreement

A contract where an item is leased for a period of time and the lessee has the option to purchase the item at the end of the agreement.