A Downside of Sales Contests Is That ________

question 70

Multiple Choice

A downside of sales contests is that ________.

• A)they can be easily overused
• B)they may eliminate any long-term sales increases
• C)they motivate salespeople to simply wait to sell subject products until the contest period
• D)A and B
• E)A,B,and C

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Definitions:

Net Present Value

The disparity between cash inflows' present value and cash outflows' present value through a certain time frame, utilized to determine an investment's profitability.

Fixed Costs

Costs that do not change with the level of output or sales, such as rent, salaries, and insurance premiums.

Cash Break-even Point

The point at which a business's cash inflows equal its cash outflows, excluding financing.

Degree of Operating Leverage

A ratio that quantifies the sensitivity of a company's operating income to its sales, demonstrating the impact of fixed and variable costs on profitability.