Markup Pricing

question 55

Multiple Choice

Markup pricing:

• A)is commonly used in retailing.
• B)is commonly used by manufacturers.
• C)is most often used to describe the pricing of jobs that are nonroutine and difficult to "cost" in advance.
• D)is a psychological pricing strategy.

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Definitions:

Working Capital

The difference between a company's current assets and current liabilities, indicating the available short-term resources to fund operations.

Income Tax Rate

The percentage of an individual or company's income that is paid to the government as tax.

After-Tax Discount Rate

The discount rate used in capital budgeting that accounts for taxes and reflects the net cost of borrowing and the opportunity cost of investing.

Straight-Line Depreciation

A method of calculating depreciation of an asset, where the expense is evenly spread over its useful life.