John assured his venture capitalists an earning of 25-percent return on equity when he began his IT startup. In order to achieve this result, he will most likely use which of the following pricing approaches?
A) value-based pricing
B) markup pricing
C) EDLP
D) customer-based pricing
E) target return pricing

Question

Quizplus · Accepted Answer

Target return pricing is a pricing approach where the business sets the price based on the target level of return on investment. In this case, John has set a target return of 25% on equity. Therefore, he will most likely use target return pricing to determine the price of his product or service to ensure that he achieves his desired return on investment.

John Assured His Venture Capitalists an Earning of 25-Percent Return