Brand Names Such as "Nabisco" or "Sony

question 153

Multiple Choice

Brand names such as "Nabisco" or "Sony"

• A) raise the cost of goods because they require advertising to make consumers aware of the brand name and, therefore, generally increase the price of products to consumers without producing any benefit to them.
• B) generally convey little information about a product to consumers.
• C) benefit consumers by assuring them of a known quality level when they buy a product that they have little previous first-hand knowledge about.
• D) provide the most value to consumers for goods that are repeat-purchase items.

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Definitions:

Interest Coverage Ratio

A financial metric that measures a company's ability to pay interest on its outstanding debt.

ROE

Return on Equity; a measure of a corporation's profitability that reveals how much profit a company generates with the money shareholders have invested.

Debt to Equity Ratio

A financial ratio indicating the relative proportion of shareholders' equity and debt used to finance a company's assets.

Fixed Costs

Expenses that remain constant for a given period of time, regardless of the level of production or output.