Arbol Industries Developed Customer Scorecards Plotting Cost to Serve and Net

question 40

Multiple Choice

Arbol Industries developed customer scorecards plotting cost to serve and net price paid. This enabled the company to determine the

• A) competitive advantage.
• B) profitability of the customer.
• C) timing and quantity of previous sales.
• D) level of brand loyalty.
• E) market share.

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Definitions:

Depreciation Expense

An accounting method that allocates the cost of a tangible asset over its useful life.

Fixed Assets

Long-term tangible assets used in the operations of a business, not expected to be converted to cash within a year.

Net Investment

The total amount of money spent on capital assets, such as buildings and machinery, minus any depreciation.

EBIT

Earnings Before Interest and Taxes, a measure of a firm's profit that includes all income and expenses (operating and non-operating) except interest and income tax expenses.