Energy Bar Scenario
Product Nutrition Labels Provide Considerable Information for Consumers

question 11

Multiple Choice

Energy Bar Scenario
Product nutrition labels provide considerable information for consumers. For example, a consumer deciding among the many brands of energy bars might compare three offerings: Clif Bar, Larabar, and ProBar. The most important attribute for this consumer is protein content, followed by calories, taste, sugar, price, and fat content. This consumer would like an energy bar with a high protein content but low in calories, sugar, fat, and price that also tastes good. Information is easily found on nutrition labels for all but the taste attribute. This information is summarized in the following table:
$\begin{array}{llll}\begin{array}{l}\text { Attributes in order of } \\\text { importance }\end{array} & \text { Clif Bar } & \text { Larabar } & \text { ProBar } \\\text { Protein } & 10 \text { grams } & 5 \text { grams } & 8 \text { grams } \\\text { Calories } & 250 & 190 & 350 \\\text { Taste } & ? & ? & ? \\\text { Sugar } & 13 \text { grams } & 17 \text { grams } & 14 \text { grams } \\\text { Price } & \$ 1.13 & \$ 1.25 & \$ 2.50 \\\text { Fat } & 2 \text { grams } & 9 \text { grams } & 8 \text { grams }\end{array}$
-Refer to Energy Bar Scenario. Which type of product category best describes "energy bar"?

• A) superordinate
• B) subordinate
• C) unbounded
• D) bounded

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Definitions:

Net Cash Flow

The difference between a company's cash inflows and outflows during a specific period.

Capital Budgeting

The process of evaluating and selecting long-term investments that are in line with the strategy and financial performance of an organization.

Payback Period

The payback period is a capital budgeting metric that measures the time required for an investment to generate cash flows sufficient to recover its initial cost, helping assess the risk and efficiency of an investment.

Net Present Value

The difference between the present value of cash inflows and the present value of cash outflows over a period of time, used as a method for evaluating the profitability of an investment.