Question 1

If the cash discount terms for a $500 purchase are 4/10 net 30,the number 10 refers to

Accepted Answer

The first number in the cash discount terms refers to the percentage discount (4 percent)if customers pay for the item within the days specified by the second number-the length of time for which the discount will be valid (10).The third number means that the total purchase price of $500-without any discounts-is due within 30 days of the invoice date on the bill.

Question 2

A trade-in allowance is

Accepted Answer

Key term definition-trade-in allowance.

Question 3

Larry's Lawn Care allows customers to use a credit card for purchases.Larry pays 4 percent of the sale to the credit card company.To promote more business,Larry decides to offer a lower price to customers paying cash-that price being 3 percent less than the standard list price.Larry is giving his customers a(n)

Accepted Answer

Larry is providing a cash discount to customers equal to the cost of credit.Cash discounts are typically expressed as a percentage off the list price.

Question 4

The acronym EDLP stands for

Accepted Answer

Key term definition-everyday low pricing.

Question 5

Instead of everyday low prices (EDLP),supermarkets prefer a(n)________ approach,which is based on frequent specials where prices are temporarily lowered for a brief period of time and then raised again.

Accepted Answer

The Marketing Matters box describes how supermarkets prefer Hi-Lo pricing based on frequent specials that they believe enables them to have higher profits than with EDLP.See Marketing Matters.

Question 6

Allowances,like discounts,are

Accepted Answer

Key term definition-allowances.

Question 7

Manufacturers or even wholesalers make geographical adjustments to list or quoted prices to reflect

Accepted Answer

Geographical adjustments are made by manufacturers or even wholesalers to list or quoted prices to reflect the cost of transportation of the products from seller to buyer.

Question 8

A promotional allowance is

Accepted Answer

Key term definition-promotional allowances.

Question 9

Reductions from list or quoted prices to buyers for performing some activity are referred to as

Accepted Answer

Key term definition-allowances.

Question 10

A price reduction given when a used product is part of the payment on a new product is referred to as a

Accepted Answer

Key term definition-trade-in allowance.

Question 11

Everyday low pricing refers to

Accepted Answer

Key term definition-everyday low pricing.

Question 12

When Sherman bought gas,he noticed the convenience store offered him a 2 percent reduction in price if he paid cash rather than if he used his credit card to pay for his purchase.The convenience store was offering him a

Accepted Answer

Retailers provide cash discounts to customers to eliminate the cost of credit granted to them.

Question 13

Which of the following statements about everyday low pricing (EDLP)is most accurate?

Accepted Answer

EDLP eliminates manufacturer allowances.Some argue that EDLP without price specials is boring for many grocery shoppers who welcome price specials.See Marketing Matters.

Question 14

A new car dealer can reduce the list price of a new Ford F-150 pickup truck by offering you a ________ of $1,000 for your 2006 Nissan Altima.

Accepted Answer

A trade-in allowance is a price reduction given when a used product is part of the payment on a new product.

Question 15

A construction company was offered a 3 percent reduction in price off all invoices from a lumberyard for paying within 10 days of issue.The lumberyard was offering a

Accepted Answer

To encourage retailers to pay their bills quickly,manufacturers offer them cash discounts.Cash discounts are typically expressed as a percentage off the list price.

Question 16

Geographic adjustments are made by manufacturers or wholesalers to cover

Accepted Answer

Geographic adjustments are made by manufacturers or wholesalers to list or quoted prices to reflect the cost of transportation of the products from seller to buyer.

Question 17

The practice of replacing promotional allowances with lower manufacturer list prices is referred to as

Accepted Answer

Key term definition-everyday low pricing.

Question 18

Cash payments or an extra amount of "free goods" awarded sellers in the channel for undertaking certain advertising or selling activities to promote the product is referred to as a

Accepted Answer

Key term definition-promotional allowances.

Question 19

After offering a promotional allowance,the price of a product returns to its regular price level.When this happens,the retail store's gross margin on that product ________ on those items that were bought with the allowance but not sold during the price special promotion.

Accepted Answer

After offering a promotional allowance,the price of a product returns to its regular price level.When this happens,the retail store's gross margin on that product increases substantially on those items that were bought with the allowance but not sold during the price special promotion.See Marketing Matters.

Question 20

Which of the following statements regarding a trade-in allowance is most accurate?

Accepted Answer

A trade-in allowance is a price reduction given when a used product is part of the payment on a new product.Trade-ins are an effective way to lower the price a buyer has to pay without formally reducing the list price.

Quiz 14: Arriving at the Final Price

If the cash discount terms for a $500 purchase are 4/10 net 30,the number 10 refers to

A trade-in allowance is

The acronym EDLP stands for

Instead of everyday low prices (EDLP) ,supermarkets prefer a(n) ________ approach,which is based on frequent specials where prices are temporarily lowered for a brief period of time and then raised again.

Allowances,like discounts,are

Manufacturers or even wholesalers make geographical adjustments to list or quoted prices to reflect

A promotional allowance is

Reductions from list or quoted prices to buyers for performing some activity are referred to as

A price reduction given when a used product is part of the payment on a new product is referred to as a

Everyday low pricing refers to

When Sherman bought gas,he noticed the convenience store offered him a 2 percent reduction in price if he paid cash rather than if he used his credit card to pay for his purchase.The convenience store was offering him a

Which of the following statements about everyday low pricing (EDLP) is most accurate?

A new car dealer can reduce the list price of a new Ford F-150 pickup truck by offering you a ________ of $1,000 for your 2006 Nissan Altima.

A construction company was offered a 3 percent reduction in price off all invoices from a lumberyard for paying within 10 days of issue.The lumberyard was offering a

Geographic adjustments are made by manufacturers or wholesalers to cover

The practice of replacing promotional allowances with lower manufacturer list prices is referred to as

Cash payments or an extra amount of "free goods" awarded sellers in the channel for undertaking certain advertising or selling activities to promote the product is referred to as a

After offering a promotional allowance,the price of a product returns to its regular price level.When this happens,the retail store's gross margin on that product ________ on those items that were bought with the allowance but not sold during the price special promotion.

Which of the following statements regarding a trade-in allowance is most accurate?