A Salesperson Tells His Customers That He Will Give Them

question 48

Multiple Choice

A salesperson tells his customers that he will give them some freebies if they purchase laptops from his store.However,he has neither asked the store manager if he can do so,nor checked if the shop has an adequate stock of freebies.As such,he is not able to deliver the freebies to his customers.Which decision-making trap is this an example of?

• A) Responding inappropriately to failure
• B) Tempting to promise too much
• C) Blaming someone else for one's failures
• D) Consulting with outside experts

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Definitions:

Market Rate

The current interest rate offered in the market for instruments with similar risk and maturity levels.

Present Value Factor

A financial calculation used to determine the present value of a sum of money to be received in the future by accounting for time value of money.

Issue Price

The price at which new shares are offered to the public by a corporation during an issuance.

Effective-interest Amortization

A method of amortizing the premium or discount on bonds payable that reflects the periodic interest expense based on the bond's carrying value.