Which of the Following Is Not a Qualitative Issue in a Special

question 77

Multiple Choice

Which of the following is not a qualitative issue in a special order pricing decision?

• A)Will it generate a positive contribution margin?
• B)If the special order generates new business,will the customer purchase again at the regular price?
• C)If the special order uses a lower quality component that is used for regular orders,will it negatively affect the company's reputation?
• D)Will accepting the special order require the hiring of extra workers or payment of overtime?

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Definitions:

Discount Rate

The interest rate used to discount future cash flows to their present value, reflecting the opportunity cost of capital.

Tax Credit

An amount that taxpayers can subtract directly from taxes owed to their government.

Forecast Error

Forecast error is the difference between the actual value and the predicted value in a forecast, indicating the accuracy of forecasting models.

IRR

Internal Rate of Return, a financial metric used to evaluate the profitability of potential investments.