Your Subscription to Consumer Reports Is About to Expire

question 32

Multiple Choice

Your subscription to Consumer Reports is about to expire.You may renew it for $24 a year or, instead, you may get a lifetime subscription to the magazine for a onetime payment of $400 today.Payments for the regular subscription are made at the beginning of each year.Using a discount rate of 5%, how many years does it take to make the lifetime subscription the better deal?

• A)25 years
• B)28 years
• C)30 years
• D)40 years

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Definitions:

Bundling

Bundling refers to the marketing strategy where multiple products or services are sold as a single combined package, often at a discounted price compared to buying each item individually.

Sales Revenue

The total amount of money generated by the sale of goods or services before any costs are subtracted.

Arc Advertising Elasticity

The measure of a market's responsiveness to a change in advertising expenditure over a specified range, indicating the effectiveness of advertising campaigns.

Advertising Expenditure

The amount of money a company spends on promoting its products or services through various advertising channels.