The Return on Assets Pricing Method

question 116

Multiple Choice

The return on assets pricing method

• A)has very little appeal and support.
• B)has a primary objective of earning a minimum rate of return on assets.
• C)is a crude approach to pricing and should be used as a last resort.
• D)replaces the desired rate of return used in cost-based pricing methods with a desired profit objective.

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Definitions:

Comparative Advantage

The ability of a country, company, or individual to produce a good or service at a lower opportunity cost than competitors.

Autarky

An economic policy or situation in which a country is self-sufficient and does not engage in international trade.

Cattle

Large domesticated bovines raised for their meat, milk, or hides, but in economic context, it broadly relates to agricultural commodities.

Opportunity Cost

The expense incurred by not selecting the second-best choice while deciding or preferring one option to another.