Explain how a firm benefits from customers purchasing many times from the firm versus just one time
What will be an ideal response?
A firm's profitability and long-term success will be far greater if it develops long-term relationships with its customers so that those customers buy from this firm again and again. Costs will be far higher and profits lower if each customer purchase is a first-time sale, as it is more expensive to attract a new customer than it is to maintain a relationship with a current customer.
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Working capital management includes which one of the following?
A. Deciding which new projects to accept B. Deciding where to purchase a new machines or fix a currently owned machine C. Determining which customers will be granted credit D. Determining how many new shares of stock should be issued E. Establishing the target debt-equity ratio
Winston purchased a word processing software package for his business. Which of the following statements is true?
A) As owner of the software, Winston has the right to make as many copies as he wishes without worrying about copyright infringement. B) Winston has purchased a licence to use the software and may copy it onto his hard drive and make a reasonable number of back-up copies. C) Winston has purchased a licence of the software and may copy it onto his hard dive, making a reasonable number of back-up copies provided they are for his own use and the copying has been authorized by the author of the program. D) Winston has the right to copy the software onto his hard dive but not to make any back-up copies as the original software package purchased acts as a back-up copy. E) Winston has the right to make six back-up copies.