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Use the Following to Answer Questions

question 73

Multiple Choice

Use the following to answer questions:
Scenario: Accounting and Economic Profit
Rather than put the $100,000 that his grandmother left him in a mutual fund that earns 5% each year, Tommy Wang quit his job, which paid $60,000 per year, and started Wang's Wicker Furniture Store. He rented a showroom for $20,000 for the year, purchased $60,000 in wicker furniture, and incurred costs of $40,000 for sales help and advertising. Instead of using the capital for his own business, he could rent it to a rival firm and earn $5,000 a year. In his first year, his revenue was $150,000.
-(Scenario: Accounting and Economic Profit) Look at the scenario Accounting and Economic Profit. The accounting profit of Wang's Wicker Furniture Store is:

Identify and differentiate between various types of innovation in product development.

Understand the criteria and timeframes that define when a product can be labeled as new.

Recognize common reasons for new product failure and strategies to mitigate these risks.

Explain the importance of a well-defined product protocol before development begins.

Definitions:

Value-Based Pricing

A pricing strategy where the price of a product or service is determined based on the perceived value to the customer rather than the cost of production.

Required Return

The minimum expected return by investors for investing in a particular security or project, reflecting the risk level.

Investment

The allocation of resources, such as capital, time, or assets, with the expectation of receiving future benefits or returns.

Useful Life

The estimated duration of time an asset is expected to be useful for the business before it becomes obsolete or too costly to maintain.