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NEW QUESTION 39
If Bandit Co. reports expenses on an accrual basis, interest expense for the first year of operations is

• A. US $5,000
• B. US $10,000
• C. US $7,500
• D. US $12,500

Answer: C

Explanation:
Interest expense for the first year equals the US $5,000 payment made on October 1 plus the 3 months' accrued interest at year-end, or US $7,500$5,000 + $2,500).

NEW QUESTION 40
During which phase of the contacting process ate contracts drafted for a proposed business activity?

• A. Bidding phase
• B. Management phase
• C. Development phase
• D. Initiation phase

Answer: D

NEW QUESTION 41
Setting the introductory price of a new product relatively high is:

• A. Market-based pricing.
• B. Pricing by intermediaries.
• C. Price skimming.
• D. Penetration pricing.

Answer: C

Explanation:
Price (market) skimming is the practice of setting an introductory price relatively high to attract buyers who are not concerned about price and to recover research and development costs rather quickly. The opposite approach is to use penetration pricing, which involves setting a relatively low price to gain deep market penetration quickly.

NEW QUESTION 42
......

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