The Most Serious Disadvantage Inherent in a Freestanding Site Is

question 2

Multiple Choice

The most serious disadvantage inherent in a freestanding site is:

• A) high rent
• B) lack of restrictions on merchandise sold
• C) lack of synergy with other stores
• D) loss of direct competition
• E) loss of the ability to restrict hours of operation

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Definitions:

Fixed Costs

Costs that do not change with the level of output or sales, such as rent, salaries, and loan payments.

Tax Rate

The percentage at which an individual or corporation is taxed, which can vary depending on income levels or profit margins.

Variable Cost

Expenditures that fluctuate based on production or sales volume, for instance, materials and manpower.

Required Rate

The minimum rate of return on an investment that a manager or investor is willing to accept, considering its risk.