Use the Table for the Question(s) Below

question 28

Multiple Choice

Use the table for the question(s) below. FCF Forecast ($ million)
Banco Industries expect sales to grow at a rapid rate over the next 3 years, but settle to an industry growth rate of 5% in year 4. The spreadsheet above shows a simplified pro forma for Banco Industries. Banco industries has a weighted average cost of capital of 11%, $40 million in cash, $70 million in debt, and 18 million shares outstanding. If Banco Industries can reduce its operating expenses so that EBIT becomes 12% of sales, by how much will its stock price increase?

• A) $3.27
• B) $3.92
• C) $5.72
• D) $9.80

Describe various suggestion techniques used by salespeople.

Assess the importance of nonverbal communication in selling.

Understand how to manage interruptions and maintain engagement during sales presentations.

Explain the significance of building trust with customers and strategies for achieving it.

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Definitions:

Loss Aversion Technique

A psychological strategy used in various fields, including investing and marketing, that leverages the individuals’ tendency to prefer avoiding losses to acquiring equivalent gains.

Decision Making

The process of making choices by identifying a decision, gathering information, and assessing alternative resolutions.

Affect Heuristic

A mental shortcut used in decision making that involves relying on current emotions to evaluate the desirability and risks of different options.

Real Buying Power

The actual amount of goods and services that can be purchased with a unit of currency, taking into account inflation and other factors affecting price levels.