Crimson Corp., an American apparel company, has a tie-up with a European football club. Crimson sells a line of jerseys with the football club's logo on it. The company has to pay a percentage of its earnings from the sales of the jerseys to the football club. In this scenario, the payments are called _____.

Question

Quizplus · Accepted Answer

The payments are called royalties because they are a percentage of the earnings from the sales of the jerseys paid to the football club for using its logo, which is a common practice in licensing agreements.