A Comparison of Year-To-Year Changes in Customer Net Present Value

question 24

Multiple Choice

A comparison of year-to-year changes in customer net present value estimates

• A)is one way to be certain of the customer evaluation process.
• B)highlights whether managers have been successful in maintaining long-run profitable relationships with their customers.
• C)can be used to motivate customers.
• D)is difficult to calculate because of the need to know the customers' cost of capital.
• E)can be used in place of the payback method.

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Definitions:

Long-Term Asset

A long-term asset is an asset that is not expected to be converted into cash within a year and is used over a long period, such as property, plant, and equipment.

Intangible Asset

An asset that lacks physical substance and usually is very hard to evaluate, such as patents, trademarks, and copyrights.

Lease Term

The period for which a lease agreement is effective, specifying the duration for which the lessee has the right to use the property.