Which of the Following Statements Regarding Corporate Vertical Marketing Systems

question 292

Multiple Choice

Which of the following statements regarding corporate vertical marketing systems is most accurate?

• A)successive stages of production and distribution are under shared ownership with all links in the marketing chain sharing title to the goods.
• B)corporate vertical marketing systems can use forward integration or backward integration but not both.
• C)corporate vertical marketing systems reduce distribution costs and gain greater control.
• D)capital investment increases but fixed costs decrease with corporate vertical marketing systems.
• E)corporate vertical marketing systems are only effective with low-end consumer goods.

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Definitions:

Guaranteed Payment

A fixed payment made to a partner by a partnership, independent of the partnership's profitability.

Cash Distribution

The payment of earnings, interest, or dividends in cash to shareholders or partners by a corporation, partnership, or other entity.

Liquidating Distribution

A payment made by a corporation to its shareholders during its dissolution, distributing its assets to the owners according to their ownership share.

Basis

The amount paid for an asset, used to determine gain or loss for tax purposes upon sale or other disposition.