Which of the Following Statements Is TRUE

question 59

Multiple Choice

Which of the following statements is TRUE?

• A)Managers often find the bar chart presentation to be the most accurate way to analyze customer profitability.
• B)Managers find customer-profitability analysis useful because it frequently highlights how vital a small set of customers is to total profitability.
• C)Managers find customer-profitability analysis useful because when a customer is ranked in the loss category, they can focus their resources on this type of customer.
• D)The 80/20 rule means that 80% of the customers provide 80% of the profit and 20% of the customers provide the remainder.
• E)Managers can ensure that low profitability customers receive high priority.

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Definitions:

Future Value

The value of an investment or a sum of money projected to grow over a specified period of time, often calculated using the interest rate.

Present Value

Present value is the current worth of a future sum of money or stream of cash flows given a specified rate of return, used in time value of money calculations to compare investment options.

Amortized Loan

A loan with scheduled periodic payments that consist of both principal and interest, so the loan is paid off by the end of the term.

Repayment Of Principal

Repayment of principal is the process of paying back the original amount borrowed in a loan, separate from interest payments.