At a Certain University, Three Bookstores - the University Bookstore

question 61

Multiple Choice

At a certain university, three bookstores - the University Bookstore, the Campus Bookstore, and the Book Mart - currently serve the university community. From a survey conducted at the beginning of the fall quarter, it was found that the University Bookstore and the Campus Bookstore each had 30% of the market, whereas the Book Mart had 40% of the market. Each quarter the University Bookstore retains 80% of its customers, but loses 10% to the Campus Bookstore and 10% to the Book Mart. The Campus Bookstore retains 90% of its customers, but loses 5% to the University Bookstore and 5% to the Book Mart. The Book Mart retains 70% of its customers, but loses 10% to the University Bookstore and 20% to the Campus Bookstore. ​
What percent of the market will each store have at the beginning of the third quarter?
​

• A) University Bookstore: 27.15 %
• Campus Bookstore: 40.45 %
• Book Mart: 32.4 %
• ​
• B) University Bookstore: 27.95 %
• Campus Bookstore: 41.25 %
• Book Mart: 30.8 %
• ​
• C) University Bookstore: 30.35 %
• Campus Bookstore: 42.85 %
• Book Mart: 26.8 %
• ​
• D) University Bookstore: 28.75 %
• Campus Bookstore: 43.65 %
• Book Mart: 27.6 %
• ​
• E) University Bookstore: 29.55 %
• Campus Bookstore: 42.05 %
• Book Mart: 28.4 %
• ​

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Definitions:

Amortization

The process of spreading the cost of an intangible asset over its useful life.

Inventory Costing

Methods for assigning costs to inventory and to the cost of goods sold, such as FIFO (First-In, First-Out) or LIFO (Last-In, First-Out), impacting financial statements.

Investment Account

An account held by an individual or entity with a financial institution for the purpose of trading, holding, and managing securities and financial assets.

Significant Influence

The power to participate in the financial and operating policy decisions of an investee, but not control or jointly control those policies.