Locking in Customers by Making It Difficult or Expensive for Customers

question 33

Multiple Choice

Locking in customers by making it difficult or expensive for customers to move to another product is called establishing high ________.

• A)entry barriers
• B)switching costs
• C)product standards
• D)brand value

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Definitions:

CCA Tax Shield

A deduction that allows Canadian businesses to reduce taxable income based on the depreciation of tangible property.

Present Value

The current value of a future sum of money or stream of cash flows given a specified rate of return. Present value calculations are widely used in finance and investment for assessing the value of investments.

Discount Rate

The rate of interest employed in DCF calculations for finding out the present value of cash flows expected in the future.

Cost Reduction

Strategies and actions taken to lower expenses and improve efficiency, increasing overall profitability.