Question 1

The _____ of an investment is the net value today of future cash inflows minus the investment.

Accepted Answer

The definition provided is describing the net present value (NPV) of an investment. It involves calculating the present value of expected cash inflows and subtracting the initial investment. The other options listed (net opportunity cost, return on investment, customer lifetime value, and adjusted opportunity cost) do not fit the definition given.

Question 2

Tonya is a manager of a retail clothing store.A sales rep calling on her offers overnight delivery on all re-orders at no extra shipping cost.This will allow Tonya to carry fewer items in the store than earlier and save money by increasing her:

Accepted Answer

By taking advantage of the sales rep's offer of overnight delivery on re-orders, Tonya can carry fewer items in the store and still meet customer demand in a timely manner. This will increase her inventory turnover rate, which means she can sell her existing inventory faster and place more orders with the sales rep, resulting in improved cash flow and savings.

Question 3

By investing in a John Deere PowerTech engine for $3,200,a pallet manufacturer was able to show a net savings of $500 in annual maintenance costs.Calculate the return on investment for the engine.

Accepted Answer

The return on investment (ROI) is calculated by dividing the net savings or profit by the initial investment cost, then multiplying by 100 to get a percentage. Here, ROI = ($500 / $3,200) * 100 = 15.6%.

Question 4

Identify a common method of quantifying a solution for a customer.

Accepted Answer

All of these methods (cost-benefit analysis, return on investment, net present value, and payback period) can be used to quantify a solution for a customer. Each method provides a different perspective on the financial impact of the solution and can be useful for different types of projects or investments. It is important to consider all of these methods when evaluating potential solutions to ensure that the best option is selected.

Question 5

Jordan,the owner of a motorcycle firm,wants to reduce the cost of maintaining the existing equipment of his firm.Joe,a salesperson,recommends a new type of equipment to reduce the maintenance costs.The cost of the new equipment is $50,000,but it would save Jordan $75,000 in total.If Jordan decides to purchase the new equipment,then his return on investment will be:

Accepted Answer

Jordan's investment is the cost of the new equipment, which is $50,000. 
The total savings he will receive is $75,000. 
Therefore, his return on investment is ($75,000 - $50,000) / $50,000 = 50%.
To convert to a percentage, multiply by 100%, giving a return of 150%.

Question 6

Jessica is investing in a capital equipment for her printing press.She wants to know how long it will take for her investment to be returned in the form of savings.The new equipment costs $600,000,and the maintenance costs of the new equipment will save her $120,000 per year.The payback period is _____.

Accepted Answer

The payback period is calculated by dividing the initial investment by the annual savings. So, $600,000 / $120,000 = 5 years.

Question 7

Goodman Woodworks has recently purchased a new saw costing $14,000.Because of a revolutionary new cutting blade,the new saw will not cause the veneer to splinter and will make clean cuts.This will save the firm $1,200 each year,which goes in wastage.Calculate the payback period for the $14,000 investment.

Accepted Answer

The payback period is calculated by dividing the initial investment by the annual savings. $14,000 / $1,200 = 11.67 years. However, since 11.67 is not an option, the closest correct choice is 13 years.

Question 8

The profit margin on the sale of a good is 20 percent,and the selling price of the good is $5,000.Calculate the cost of the good.

Accepted Answer

The profit margin is the profit as a percentage of the selling price. So, if the selling price is $5,000 and the profit margin is 20%, the profit is 20% of $5,000, which is $1,000. Therefore, the cost of the good is the selling price minus the profit, which is $5,000 - $1,000 = $4,000.

Question 9

Miguel sells high-end computers to clients in his neighborhood.The profit margin is 20 percent,and the cost of each unit of computer is $10,000.The selling price of each unit must be:

Accepted Answer

To find the selling price, you need to add the profit margin to the cost:
Profit Margin = 20% = 0.20
Cost = $10,000
Selling Price = Cost + (Profit Margin x Cost)
Selling price = $10,000 + (0.20 x $10,000)
Selling price = $10,000 + $2,000
Selling price = $12,000
Therefore, the best choice is C.

Question 10

The cost of a good is $1,500.A seller sells it at a markup of $500.The profit margin is:

Accepted Answer

Markup = Selling price - Cost price. 
Here, the selling price = Cost price + Markup = $1,500 + $500 = $2,000.
Profit margin = (Markup/Cost price) × 100% = (500/1500) × 100% = 33.33...%
However, the options only give approximate values, so the closest option is C, 25 percent.

Question 11

The _____ is the return a buyer would have earned from a different use of the same investment capital.

Accepted Answer

Opportunity cost is the return or profit foregone from the next-best alternative decision or investment. It represents the cost of an alternative that must be forgone in order to pursue a certain action. Sunk cost (A) is a cost that has already been incurred and cannot be recovered, fixed cost (B) is a cost that does not change with an increase or decrease in the number of goods or services produced or sold, gross revenue (D) is the total revenue earned from the sale of goods or services before any deductions or expenses, and net revenue (E) is the total revenue earned from the sale of goods or services after all deductions or expenses.

Question 12

A sportswear manufacturer usually keeps an average of 2,000 units of footwear in stock.The total sale is 60,000 units.The inventory turnover is _____.

Accepted Answer

Inventory turnover is calculated by dividing the total sales by the average inventory. Here, 60,000 units / 2,000 units = 30 units.

Question 13

Which of the following is recommended as a good way to deal with the jitters when making a sales presentation?

Accepted Answer

The best way to deal with jitters during a sales presentation is subjective and depends on the individual. However, some common techniques that may work for some individuals include deep breathing exercises, positive affirmations, visualization techniques, and practicing the presentation beforehand. Avoiding the use of visuals or stress management techniques may hinder the effectiveness of the presentation. It is also important to remember that even professional salespeople can get nervous and it is normal to feel this way. Apologizing for being nervous may draw attention to it and make the situation more uncomfortable for both the buyer and the seller.

Question 14

Sonya showed the office manager at Arunden Solutions how he could pay for the new copier she was selling by bringing more of Arunden's printing jobs in-house,saving money that had previously been spent on local printers.Sonya is using _____ to quantify the solution.

Accepted Answer

Sonya is analyzing the costs and benefits of bringing the printing jobs in-house to show how it can offset the cost of the new copier. This is an example of cost-benefit analysis.

Question 15

Ramiro,the owner of a supermarket,decides to keep relatively high levels of inventory even though it is expensive.Ramiro most likely thinks that the cost of _____ is greater than the benefits of increasing his turnover rate.

Accepted Answer

Choosing to keep high levels of inventory can help reduce or eliminate stockouts, which is when a business runs out of a particular product and cannot fulfill customer orders. If Ramiro believes that the cost of losing customers due to stockouts is greater than the cost of keeping excess inventory, then he would choose to keep higher levels of inventory.

Question 16

Salespeople can strengthen their presentations by showing the prospect that the cost of the proposal is offset by added value;this process is called:

Accepted Answer

Value analysis involves demonstrating how the cost of a proposal is offset by the value and benefits it provides. This approach can strengthen the sales presentation and overcome price objections from the prospect. Magnifying the benefit, market analysis, multiple-sense appeal, and content analysis are not directly related to demonstrating the cost offset by added value.

Question 17

Jay purchases new capital equipment at his motorcycle factory.The new equipment costs $150,000,and the net savings he is likely to make is $75,000.Calculate Jay's return on investment (ROI).

Accepted Answer

The answer of Jay purchases new capital equipment at his...

Question 18

Fiona,the manager of a retail store,wants to know whether she is maximizing her return on space investment.She will have to calculate the _____ for the area of the store.

Accepted Answer

To determine whether she is maximizing her return on space investment, Fiona will have to calculate the sales per square foot for the area of the store. This metric will help her understand how much revenue she is generating per unit of space used and whether she can improve her sales by optimizing the use of her store space.

Question 19

The _____ is the net profits expected from a given investment,expressed as a percentage of the investment.

Accepted Answer

Return on investment (ROI) measures the profitability of an investment by calculating the net profits as a percentage of the investment. Net revenue is the total revenue minus expenses, and does not take into account the investment made. Net present value (NPV) is the current value of expected cash flows in the future, adjusted for the time value of money. Gross investment value is the total amount invested, without considering the return. Opportunity cost is the cost of forgoing one option in favor of another.

Question 20

The payback period:

Accepted Answer

The payback period is a measure of financial risk that indicates the length of time that it will take for an investment to generate cash inflows or savings that equal the initial cost of the investment. It is a useful tool for evaluating the financial feasibility of an investment and determining whether or not it is worth pursuing.

Quiz 9: Strengthening the Presentation