A Major Benefit of Using Test Markets as a Quantitative

question 225

Multiple Choice

A major benefit of using test markets as a quantitative forecasting method is that:​

• A)​they provide realistic information on actual purchases rather than intent to buy.
• B)​they are quick and inexpensive.
• C)​they combine and average the outlooks of top executives from such areas as marketing, finance, and production.
• D)​they solicit opinion from experts outside the firm such as academic researchers.

---

Definitions:

Transfer Price

The price charged when one responsibility center within a company provides goods or services to another responsibility center in the same company.

Return On Investment

A measure used to evaluate the efficiency of an investment or compare the efficiency of several different investments, calculated by dividing the benefit (return) of an investment by the cost of the investment.

Performance Measure

Indicators used to evaluate the efficiency, effectiveness, or success of an organization or individual in achieving objectives.

Project Rejection

The process of declining to move forward with a project after evaluating its feasibility, risks, and potential returns.