Exam 16: Pricing and Credit Decisions

Match the term with its definition.Some terms may not be used. a.Consumer credit b.Credit bureaus c.Credit card d.Credit e.Installment account f.Open charge account g.Revolving charge account h.Trade credit i.Trade credit agencies j.Value -A line of credit on which the customer may charge purchase at any time,up to a pre-established limit

Free

(Essay)

4.8/5

(67)

Question 1

Correct Answer:

Verified

What are the five factors that entrepreneurs need to consider with deciding to extend credit.

Free

(Essay)

5.0/5

(83)

Question 2

Correct Answer:

Verified

-Type of Business: If the product being sold has a longer life and is higher in price (appliance,furniture),than entrepreneurs will typically have credit options.If the products are more disposable or perishable (food,clothing),the credit is typically not given to the customer by the business.-Credit Policies of Competitors: Most consumers will expect a similar policy unless the company has some advantage for the buyer.-Age and Income Level of Customers: If a customer has a steady income which is typically more stable as people age,a company will be more inclined to extend credit.-Availability of Working Capital: If limited working capital is possible such as when credit sales are given to buyers,then a business may decide to limit credit.-Economic Conditions: Recessionary times impact customers,retailers,wholesalers and lenders leading to decreased extension of credit.However,if a buyer meets the above criteria,a small business owner may offer credit to increase sales.

American Express and Diner's Club are examples of entertainment credit cards.

Free

(True/False)

4.8/5

(72)

Question 3

Correct Answer:

Verified

True

The best pricing practice is to undercut competitors' prices.

(True/False)

4.8/5

(81)

Question 4

With a skimming price strategy,prices are set lower than what will be the normal,long-range price to gain more market share.

(True/False)

4.8/5

(93)

Question 5

Match the term with its definition.Some terms may not be used. a.Consumer credit b.Credit bureaus c.Credit card d.Credit e.Installment account f.Open charge account g.Revolving charge account h.Trade credit i.Trade credit agencies j.Value -Financing granted by retailers to individuals who purchase for personal or family use

(Essay)

4.8/5

(74)

Question 6

Break-even analysis begins by determining what sales level is needed to generate a profit.

(True/False)

4.9/5

(77)

Question 7

In today's competitive environment,a cash-only seller will outsell a credit selling competitor.

(True/False)

4.9/5

(76)

Question 8

Match the term with its definition.Some terms may not be used. a.Product line pricing b.Average pricing c.Follow-the-leader pricing d.Markup pricing e.Freemium strategy f.Prestige pricing g.Price lining strategy h.Price i.Skimming price strategy j.Value k.Variable pricing strategy -A technique that uses a particular competitor as a model in setting prices

(Essay)

4.8/5

(79)

Question 9

Handyman Hardware,a small community-based store,offers its consumers the option of using credit.Creditworthy individuals are able to use the "HH Credit Card" for all purchases up to a credit limit of $1,000.Consumers are required to pay at least 20 percent of their outstanding balance at the end of each month.A 2 percent finance charge is assessed on the unpaid balance at the end of each billing cycle.Handyman Hardware is employing ____ in its business.

(Multiple Choice)

4.9/5

(74)

Question 10

For installment selling,the amount of credit should not exceed the repossession value of the goods sold.

(True/False)

4.8/5

(85)

Question 11

Credit cards are an alternative to cash.

(True/False)

5.0/5

(87)

Question 12

Use product examples to illustrate elastic and inelastic demand.

(Essay)

4.8/5

(76)

Question 13

Credit bureaus maintain credit histories on individuals based on information reported to them by banks,mortgage companies,department stores,and other creditors.

(True/False)

4.8/5

(76)

Question 14

Which option is designed for long-term credit?

(Multiple Choice)

4.9/5

(89)

Question 15

Trade credit is extended to consumers purchasing large volumes of products.

(True/False)

4.8/5

(77)

Question 16

Which "C" defines the customer's asset conservation?

(Multiple Choice)

4.9/5

(78)

Question 17

Match the term with its definition.Some terms may not be used. a.Consumer credit b.Credit bureaus c.Credit card d.Credit e.Installment account f.Open charge account g.Revolving charge account h.Trade credit i.Trade credit agencies j.Value -A line of credit that allows the customer to obtain a product or service at the time of purchase,with the payment due when billed

(Essay)

4.9/5

(74)

Question 18

Match the term with its definition.Some terms may not be used. a.Aging schedule b.Average pricing c.Bad-debt ratio d.Break-even analysis e.Break-even point f.Contribution margin g.Elastic demand h.Elasticity of demand i.Inelastic demand j.Value -Sales volume at which total sales revenue equals total costs and expenses

(Essay)

5.0/5

(86)

Question 19

Match the term with its definition.Some terms may not be used. a.Aging schedule b.Average pricing c.Bad-debt ratio d.Break-even analysis e.Break-even point f.Contribution margin g.Elastic demand h.Elasticity of demand i.Inelastic demand j.Value -A categorization of accounts receivable based on the length of time they have been outstanding

(Essay)

4.9/5

(62)

Question 20

Showing 1 - 20 of 130

What are the five factors that entrepreneurs need to consider with deciding to extend credit.

American Express and Diner's Club are examples of entertainment credit cards.

The best pricing practice is to undercut competitors' prices.

With a skimming price strategy,prices are set lower than what will be the normal,long-range price to gain more market share.

Break-even analysis begins by determining what sales level is needed to generate a profit.

In today's competitive environment,a cash-only seller will outsell a credit selling competitor.

For installment selling,the amount of credit should not exceed the repossession value of the goods sold.

Credit cards are an alternative to cash.

Use product examples to illustrate elastic and inelastic demand.

Credit bureaus maintain credit histories on individuals based on information reported to them by banks,mortgage companies,department stores,and other creditors.

Which option is designed for long-term credit?

Trade credit is extended to consumers purchasing large volumes of products.

Which "C" defines the customer's asset conservation?

The Entrepreneurial Lifethe Entrepreneurial Life

Integrity, ethics, and Social Entrepreneurship

Starting a Small Business

Franchises and Buyouts

The Family Business

The Business Plan: Visualizing the Dream

The Marketing Plan

The Organizational Plan: Teams, legal Structures, alliances, and Directors

The Location Plan

Understanding a Firms Financial Statements

Forecasting Financial Requirements

A Firms Sources of Financing

Planning for the Harvest

Building Customer Relationships

Product Development and Supply Chain Management

Promotional Planning

Global Opportunities for Small Business

Professional Management and the Small Business

Managing Human Resources

Managing Small Business Operations

Managing the Firms Assets

Managing Risk

Filters