The Decision of Sears to Use Odd Prices Such as $59.99

question 128

Multiple Choice

The decision of Sears to use odd prices such as $59.99 for a Craftsman drill is an application of ____, where prices are often used to _____.

• A)odd-number pricing; increase sales because customers register the dollar amount, not the cents
• B)customary pricing; show customers products are priced based on tradition
• C)price skimming; give a product an upscale or exclusive image
• D)reference pricing; make it easier for consumers to compare
• E)everyday low prices; facilitate comparison to competitors' prices

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Definitions:

Net Income

The total profit or loss of a company after all revenues, expenses, taxes, and costs have been subtracted.

Financing Activities

These are transactions involving the flow of cash between a company and its owners and creditors. It includes issuing debt, repaying debt, stock sales, and stock repurchases.

Operating Activities

Activities that relate directly to the primary business operations of an organization, such as sales, provision of services, manufacturing of goods, etc.

Depreciation Expense

The allocation of an asset's cost over its useful life, representing the wear and tear, deterioration, or obsolescence of the asset.