Buyers Are Highly Price Sensitive When

question 63

Multiple Choice

Buyers are highly price sensitive when

• A) their purchase represents a small fraction of their procurement budget.
• B) they earn low profits or are strapped for cash.
• C) the quality of their products and services are highly affected by the quality of the inputs.
• D) the industry's products are highly characterized with non-price competition.

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Definitions:

Net Cash Flows

The difference between a company's cash inflows and outflows over a specified period.

Average Investment

A metric used to evaluate the efficiency of an investment or to compare the efficiency of a number of different investments.

Net Present Value Method

A method used in capital budgeting to evaluate the profitability of an investment or project by calculating the difference between the present value of cash inflows and the present value of cash outflows over a period of time.

Desired Rate of Return

The minimum expected yield by investors for their investment, reflecting the risk level and opportunity cost.