Which of the Following Statements About Services Is FALSE

question 39

Multiple Choice

Which of the following statements about services is FALSE?

• A)It is often not possible for customers to examine a service before it is performed.
• B)Customers often help create the service that they are consuming.
• C)The opportunity to generate revenue from a service performance disappears when some of the service provider's production capacity is not used during the service encounter.
• D)There is little chance to correct a faulty service before it reaches the customer.
• E)Customers often tend to feel less risk when purchasing a service compared to a physical good.

---

Definitions:

Interest Tax Shield

The reduction in income taxes that results from taking the allowable interest expense deductions from taxable income.

Financial Distress Costs

Expenses incurred by a firm facing financial difficulties, including legal, administrative, and potentially bankruptcy-related costs.

Reorganization

Financial restructuring of a failing firm to attempt to continue operations as a going concern.

Going Concern

An assumption that a company will continue to operate in the foreseeable future, without the intention or necessity of liquidation.