Java Jacket Is a Company That Designs and Prints Ads

question 21

Multiple Choice

Java Jacket is a company that designs and prints ads on the paper jackets that go around hot coffee cups sold in coffee shops.To find clients to advertise on the coffee cup jackets,the company sent a representative to companies like Warner Brothers,eBay.com,and the Wall Street Journal to tell them how their ads on coffee cup jackets would give them inexpensive exposure to a large number of potential customers.Java Jacket's activities can best be described as:

• A) mass communication.
• B) implicit communication.
• C) personal selling.
• D) public relations.
• E) telemarketing.

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Definitions:

Financial Leverage

Engaging borrowed assets to increase the anticipated yield from an investment.

Operating Leverage

The degree to which a company uses fixed operating costs, where a higher degree indicates that a small change in sales will have a larger impact on operating income.

Capital Structure

The mix of a company's long-term debt, specific short-term debt, common equity, and preferred equity, which is a significant factor in determining a company's financial health and risk level.

Cost Structure

The composition of fixed and variable costs that a company incurs in the process of producing goods or services.