West Coast Unlimited is a wholesaler that carries close to 20 000 products. The company has close to 3000 suppliers and sells its products mostly to business and institutional customers. The company markets its products by relying mainly on sales promotion and advertising. Faced with increasing costs, the company is looking at various ways to reduce expenses. West Coast Unlimited's vice-president feels that the company should shift one of its major distribution centres to a low-rent, low-tax area. Which of the following, if true, would strengthen the vice-president's argument?
A) West Coast Unlimited recently signed a long-term lease for the distribution centre's current location.
B) The percentage decrease in taxes is higher than the percentage decrease in rent.
C) West Coast Unlimited's competitors are also capable of moving to the low-rent, low-tax area.
D) The political environment in the new area is stable, with no expected changes in tax policy.
E) Changes in the macroeconomic environment may reduce costs associated with the current location.

Question

Quizplus · Accepted Answer

The stability of the political environment in the new area, with no expected changes in tax policy, would strengthen the vice-president's argument for moving the distribution centre by ensuring that the benefits of lower taxes will be long-lasting, making the move financially beneficial.

West Coast Unlimited Is a Wholesaler That Carries Close to 20