A Difficulty in Using Sales Per Square Foot as a Performance

question 72

Multiple Choice

A difficulty in using sales per square foot as a performance measure for a rapidly growing retailer is that it ________.

• A) will underestimate performance since a large number of stores will not be open for an entire year
• B) will overestimate performance since a large number of stores will not be open for an entire year
• C) does not take into account the different performance levels of older versus newer stores
• D) does not take into account the different performance levels of existing versus acquired stores

---

Definitions:

Opportunity Cost

The penalty of bypassing the alternative that ranks second in preference while making a choice.

Investment

The process of distributing funds with the aim of earning returns or profits.

Aggregate Expenditure Line

A graphical representation that shows the total amount of spending in an economy (consumption, investment, government spending, and net exports) at various levels of income.

Marginal Propensity to Consume

The fraction of any increase in disposable income spent on consumption, highlighting how consumption changes as income changes.