Reference no: EM133085800
Soft selling occurs when a buyer is skeptical of the usefulness of a product and the seller offers to set a price that depends on realized value. For example, suppose a sales representative is trying to sell a company a new accounting system that will, with certainty, reduce costs by 10%. However, the customer has heard this claim before and believes there is only a 40% chance of actually realizing that cost reduction and a 60% chance of realizing no cost reduction.Assume the customer has an initial total cost of $600.
According to the customer's beliefs, the expected value of the accounting system, or the expected reduction in cost, is.
Suppose the sales representative initially offers the accounting system to the customer for a price of $42.00.
The information asymmetry stems from the fact that the has more information about the efficacy of the accounting system than does the . At this price, the customer purchase the accounting system, since the expected value of the accounting system is than the price.
Instead of naming a price, suppose the sales representative offers to give the customer the product in exchange for 50% of the cost savings. If there is no reduction in cost for the customer, then the customer does not have to pay.
|
Growth stage of the industry life cycle
: 1) In the growth stage of the industry life cycle, why the barrier to entry is lower?
|
|
What would you get out of a leadership course
: 1. What would you get out of a leadership course? 2. What you you mostly to like least about the course?
|
|
Identify three things that cause you stress
: Identify three things that cause you stress and explain why each is a stressor. Then describe three strategies you use to manage your stress. Include examples i
|
|
Determine the total long-term liabilities reported
: Mortgage Payable ($15,000 due currently) 200,000. Determine the total long-term liabilities reported on the balance sheet
|
|
Expected value of the accounting system
: Soft selling occurs when a buyer is skeptical of the usefulness of a product and the seller offers to set a price that depends on realized value.
|
|
Enhanced by optimization models
: Identify two key strategic decisions made by your current team, department, or organization. How could those decisions have been enhanced by optimization models
|
|
What is the carrying value of the bond at December
: What is the carrying value of the bond at December 31, 20x1, after the first interest payment has been recorded
|
|
What is the carrying value of the bond at December
: What is the carrying value of the bond at December 31, 20x1, after the first interest payment has been recorded
|
|
Determine dividends per share for preferred and common stock
: Determine the dividends per share for preferred and common stock for each year. Round all answers to two decimal places. If an answer is zero, enter '0'
|