Reference - Alien Babies

question 64

Multiple Choice

Reference - Alien babies. Toymaker Alice came out with a doll that looked like a baby alien. Alice initially had trouble selling the doll to retailers even after offering retailers a contract by which they could buy all the dolls they needed for $10. Slick Eddie, however, who had a retail toy store, signed the agreement, whereby he could buy all the dolls he needed for $10. Slick Eddie had a toy store but did very little business because he was so sleazy. Parents wanted to keep kids out. After a few months, the baby alien doll was a surprise hit and every child wanted one. Slick Eddie, however, did not see much demand in his store because, regardless of whether he had alien baby dolls or not, parents disliked him. When demand grew, Alice raised to $40 per doll the price charged to retailers who had not signed a contract to purchase all the dolls they needed for $10. Slick Eddie decided to purchase alien dolls for $10 from Alice and then resell them for $35 to a retailer, Ben, who did not have a contract with Alice to purchase the dolls for $10. His contract with Ben required that he also gift wrap the dolls and that he would provide Ben with all the gift-wrapped dolls he could produce. Eddie then ordered 10,000 alien baby dolls from Alice. When Alice figured out what was happening, sales of alien baby dolls to Slick Eddie were stopped. What type of contract did Slick Eddie have with Alice?

• A) Requirement.
• B) Output.
• C) Executed.
• D) Both requirement and output.
• E) Requirement, output, and executed.

Understand the relationship between target market selection and positioning strategy.

Identify the components of the marketing mix and their influence on marketing strategy.

Analyze the effect of increased advertising on a company's profitability.

Comprehend basic financial metrics used in evaluating business operations.

---

Definitions:

Indirect Method

A cash flow statement preparation approach that starts with net income and adjusts for non-cash transactions and changes in working capital.

Marketable Securities

Financial instruments that are easily convertible into cash and may include stocks, bonds, and Treasury bills.

Investing Activities

Transactions involving the acquisition or disposal of long-term assets and investments, as reported in a company's cash flow statement.

Cash Dividends

Payments made by a company out of its profits to its shareholders in the form of cash.