Doug Runs a Hardware Store

question 71

Multiple Choice

Doug runs a hardware store.He learned that customers process the price of $9.99 as significantly lower than the price of $10.00 because of the reduced digit count in the price point.Accordingly,he follows this rule to set up the prices for all products.Doug uses _____.

• A)Psychological pricing
• B)One-price strategy
• C)Variable pricing
• D)Everyday low pricing (EDLP)
• E)High/low pricing

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Definitions:

Useful Life

The estimated duration of time that an asset is expected to be usable for its intended purpose.

Imputed Interest Charge

An estimated interest rate used in transactions where no interest or an unrealistic interest rate is charged.

Equity Funds

Mutual funds that invest predominantly in stocks or equities, aiming for long-term capital growth.

Avoidable Interest

Interest costs that could be avoided if an entity did not make an expenditure for an asset under construction.