The Following Information Was Presented by User-Friendly Industries Company for an Asset

question 62

Multiple Choice

The following information was presented by User-Friendly Industries Company for an asset purchased at the end of the previous year. $$\begin{array} { | l | r | } \hline \text { Original cost of the asset } & \$ 20,000 \\\hline \text { Useful life of the asset } & 10 \text { years } \\\hline \text { Annual operating profit, including depreciation } & \$ 4,000 \\\hline \text { Sabage value } & \$ - 0 - \\\hline\end{array}$$ What is the return on investment (ROI) assuming User-Friendly (a) uses the straight-line method for depreciation and (b) beginning-of-year net book values to compute ROI?

• A) 11.1%.
• B) 20.0%.
• C) 22.2%.
• D) 25.0%.

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Definitions:

Geodemographic Segmentation

The process of analyzing and classifying populations based on geography and demographic characteristics to target marketing efforts more effectively.

Internet Marketers

Professionals who specialize in the use of the internet and digital platforms to promote, sell products, and build brand awareness for businesses.

Retailers

Businesses or individuals that sell goods directly to consumers, acting as the final step in the distribution chain from manufacturers to consumers.

Loyalty Segmentation

The process of dividing a customer base into groups based on their loyalty to a brand or company, which can inform targeted marketing strategies.