Which of the Following Actions Has the Potential to Create

question 14

Multiple Choice

Which of the following actions has the potential to create a sales promotion trap or spiral in the fast-food industry?

• A)the use of celebrity spokespersons such as Shaquille O'Neill
• B)the addition of new items to the menus of fast food chains
• C)the use of 99-cent specials to promote popular items such as Burger King's Whopper and McDonald's Big Mac
• D)the location of fast food restaurants in airports and on college campuses
• E)the promotional tying of fast food with movies

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Definitions:

Net Income

The company's final financial gain once every expense, tax, and cost is subtracted from the gross income.

Operating Activities

Financial transactions and events related to the core business operations of a company.

Indirect Method

A way of preparing the cash flow statement where net income is adjusted for changes in balance sheet accounts to calculate cash flow from operating activities.

Statement of Cash Flows

A financial document that provides detailed information about the cash inflows and outflows for a business over a specific period of time.