Which of the Following Is True of a High/low Pricing

question 18

Multiple Choice

Which of the following is true of a high/low pricing strategy?

• A)Conditioning customers to buy only on sale is the main characteristic of this strategy.
• B)In this strategy,a retailer charges prices that are on level with its competitors and avoids promoting sales.
• C)Most fashion,drug,and grocery stores avoid using this pricing strategy.
• D)The main disadvantage of this strategy is that it makes it difficult for a retailer to get rid of slow-selling merchandise.

Appreciate the role of debt and equity in affecting a firm's cost of capital.

Recognize how the firm's investment decisions are influenced by the NPV and cost of capital.

Understand the impact of risk on the cost of capital components and the overall WACC.

Understand the relationship between the returns required by investors and the firm's cost of capital components.

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Definitions:

Hierarchy Of Needs

A motivational theory in psychology proposed by Abraham Maslow, depicting a five-tier model of human needs, from basic (physiological) to higher-order (self-actualization) needs.

Sequential

Occurring or following in a logical order or sequence.

Motives

Internal processes that energize, direct, and sustain behavior towards fulfilling a need or achieving a goal.

Needs

Something that is necessary to survive or thrive.