A Firm Has Just Received an Invoice for $1,000 with the Following

question 103

Multiple Choice

A firm has just received an invoice for $1,000 with the following terms: 3/10,net 30.In this case,the firm

• A)should not worry about earning the cash discount because the amount is small.
• B)can take a 10 percent discount if it pays within 3 days,and otherwise the full amount is due in 30 days.
• C)can take a 3 percent discount if it pays the invoice on the 30th day.
• D)will in effect be borrowing at an annual rate of 54 percent if it pays the invoice in 30 days.
• E)should pay $900 if it pays within 10 days.

Understand the concept and application of dual distribution and its advantages for reaching different market segments.

Understand the differences between various vertical marketing systems.

Identify and describe the three degrees of distribution density.

Choose appropriate distribution strategies for different products and services.

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Definitions:

Adverse Selection

A situation where asymmetric information leads to the selection of undesirable participants in a contract or agreement, often seen in insurance and financial markets.

Bank Deposits

Funds that customers place into banking institutions for safekeeping and to earn interest.

Asymmetric Information

A situation in markets where one party in a transaction has more or superior information compared to another.

Independent Agency

An independent agency is a governmental body designed to operate independently of political influence, often responsible for regulating certain aspects of the economy or society.