Because Orders in Organizational Buying Are Typically Much Larger Than

question 167

Multiple Choice

Because orders in organizational buying are typically much larger than in consumer buying, buyers must often ________ when the order is above a specific amount, such as $5,000.

• A) pay estimated sales taxes in advance
• B) move up the time required to execute a purchase agreement
• C) get competitive bids from at least three prospective suppliers
• D) forgo the purchase because senior management is unlikely to approve it
• E) create separate orders in amounts less than that the threshold

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Definitions:

Net Working Capital

Networking capital represents a financial indicator that assesses the capacity of a business to settle its short-term debts using its short-term assets.

Capital Spending

Monies invested by an enterprise in obtaining or upgrading real assets, including estates, manufacturing facilities, or equipment.

Operating Cash Flow

The amount of cash generated by a company's regular business operations, indicating its ability to cover expenses, debt, and investments.

Shareholders' Equity

The net value of a company, calculated by subtracting total liabilities from total assets, which represents the owners' claim after debts have been settled.