Stephanie Co

question 44

Multiple Choice

Stephanie Co.'s managers are considering alternative strategies to improve ROI from its current budgeted 20% for the coming year.Alternative 1 has more money spent on advertising to increase sales while alternative 2 has the budget for meals and entertainment expenses eliminated with a drop off in sales as a result.Adjustments to operating assets are anticipated in each of the two alternatives as well.The numbers as in the original budget and in the two alternatives are set out below: What is the relative ranking based upon ROI of the above three choices (highest to lowest) ?

• A) Original Budget,Alternative 1,Alternative 2.
• B) Alternative 1,Alternative 2,Original Budget.
• C) Alternative 2,Original Budget,Alternative 1.
• D) Original Budget,Alternative 2,Alternative 1.

---

Definitions:

Prices

The amounts of money required to purchase goods or services, setting the economic value of said goods or services in the market.

Consumption Bundle

A combination of goods and services that a consumer chooses to consume.

Subsidy

Financial support given by the government or a public body to assist an industry or business so that the price of a commodity or service may remain low or competitive.

Housing

Refers to the construction and assignment of houses or buildings for the purpose of providing shelters or places to live.