Use the Following Information to Answer the Question(s)below

question 44

Multiple Choice

Use the following information to answer the question(s) below.Consider the following four alternatives:
1.$132 received in two years.
2.$160 received in five years.
3.$200 received in eight years.
4.$220 received in ten years.
-The ranking of the four alternatives from most valuable to least valuable if the interest rate is 6% per year would be:

• A)1,2,3,4.
• B)1,3,2,4.
• C)4,3,1,2.
• D)3,4,2,1.

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Definitions:

Psychological Pricing

A pricing strategy intended to encourage customers to buy on the basis of their belief that the product or service is cheaper than it really is.

Less Expensive

Characteristic of a product, service, or proposition that costs less, making it more affordable or providing a budget-friendly option.

Loss Leader

A pricing strategy whereby a business offers a product or service at a lower price in an attempt to attract more customers.

Psychological Pricing

A pricing strategy that plays on the psychological perception of prices by consumers, often using prices that are slightly lower than a round number to encourage purchases.