I. Products are relatively undifferentiated
II. Consumer switching costs are low
A. I only.
Answer (A) is incorrect. Low consumer switching costs also increase rivalry.
B. II only.
Answer (B) is incorrect. A low degree of product differentiation also increases rivalry.
C. Neither I nor II.
Answer (C) is incorrect. Both low consumer switching costs and a low degree of product differentiation increase rivalry.
D. Both I and II.
Answer (D) is correct. The degree of product differentiation and the costs of switching from one competitor’s product to another increase the intensity of rivalry and competition in an industry. Less differentiation …show more content…
15.2.29 Which of the following cycles does not have accounting information recorded into the general ledger reporting system?
Answer (A) is incorrect. Purchasing, receiving, cash payments, and other transactions in the expenditure cycle are recorded in the general ledger.
Answer (B) is correct. Planning is the determination of what is to be done and of how, when, where, and by whom it is to be done. Plans serve to direct the activities that all organizational members must undertake and successfully perform to move the organization from where it is to where it wants to be. No transactions that require recording in the general ledger take place during the planning cycle.
Answer (C) is incorrect. Accounting for costs, deferred costs, and property involved in the production or conversion of goods or services are recorded in the general ledger.
Answer (D) is incorrect. Sales, receivables, cash receipts, bad debts, and other transactions in the revenue cycle are recorded in the general ledger.
16. 15.2.34 Which of the following is an example of an outcome of strategic …show more content…
A detailed sequence of steps for accomplishing a certain activity is a procedure.
D. A formal statement of the organization’s definition of the fundamental truths that guide its actions.
Answer (D) is incorrect. Truths that guide an organization’s actions are principles.
17. 15.1.23 Customer lifetime value for a particular customer is the
A. Customer equity.
Answer (A) is incorrect. Customer equity is the sum of the customer lifetime values for all of the firm’s customers.
B. Undiscounted amount of the net cash flows related to a particular customer.
Answer (B) is incorrect. Customer lifetime value is a discounted amount.
C. Net present value of the cash flows related to a particular customer.
Answer (C) is correct. A firm should estimate customer lifetime value, the net present value of the cash flows (purchases – costs of acquiring, selling to, and serving the customer) related to a particular customer. This amount indicates whether a given investment in a customer is justified.
D. Sum of the customer’s purchases from the firm.
Answer (D) is incorrect. The measurement of customer lifetime value also considers