A Mobile Telephone Company Charges a Base Fee Plus Additional

question 63

Multiple Choice

A mobile telephone company charges a base fee plus additional minutes for data usage.What revenue model is demonstrated in this example?

• A)contractor revenue model
• B)utility and usage revenue model
• C)professional revenue model
• D)franchising revenue model

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Definitions:

Cash Flow From Assets

The total of cash flow to bondholders and cash flow to shareholders, consisting of operating cash flow, capital spending, and additions to net working capital.

EBIT

Earnings Before Interest and Taxes, a measure of a company's profitability based purely on operational and business activities without considering interest and tax expenses.

Depreciation

An accounting method used to allocate the cost of a tangible asset over its useful life.

Net Capital Spending

The total expenditure on physical assets less any asset sales, reflecting how much a company is investing in its physical assets.