Many Firms Prefer to Distribute Directly to the Final Customer

question 307

Multiple Choice

Many firms prefer to distribute directly to the final customer or consumer because they

• A) want to control the whole marketing job.
• B) believe they can serve target customers at a lower cost.
• C) think they can do the work more effectively than intermediaries.
• D) can use the Internet to make direct distribution easier.
• E) all of these are reasons why firms prefer direct distribution.

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Definitions:

Time Value

The concept that money available today is worth more than the same amount in the future due to its potential earning capacity.

Payback Period

The time it takes for an investment to generate income or revenue equal to its cost, used to assess the feasibility or risk of an investment.

Cash Flows

The net amount of cash being transferred into and out of a business.

Internal Rate

The interest rate at which the net present value of all the cash flows (both positive and negative) from a project or investment equals zero, used in capital budgeting to measure and compare the profitability of investments.