Zach Is Opening a Tire Store

question 181

Multiple Choice

Zach is opening a tire store.He intends to set the price of tires based on determining the total cost of his purchase of one tire and then adding an amount to cover additional costs and profits.Zach is using ___ pricing.

• A) cost-based
• B) additional markup
• C) floor establishment
• D) survival

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Definitions:

Fixed Asset

A long-term tangible piece of property that a firm owns and uses in its operations to generate income.

Book Value

The net value of a company's assets minus its liabilities and preferred stock, reflecting the amount that shareholders would theoretically receive if the company was liquidated.

Market Value

The up-to-date price at which transactions for assets or services are conducted in a marketplace.

Building Account

An account used in accounting to track the costs associated with the construction or purchase of a building.