Question

To manage its inventories efficiently, KC Mart, a supermarket, enters into a five-year contract with Ziff Corp, an information technology firm. As per the contract, KC Mart has to pay $125,000 per year to Ziff Corp in exchange for the information regarding consumer purchase behaviors. In the given scenario, the cost that KC Mart has to incur is the _____
A) processing cost
B) acquisition cost
C) retrieval cost
D) storage cost

Answer 1

Answer:  acquisition cost                    

Explanation: An acquisition cost is an overall cost that a corporation pays on its properties or infrastructure books after paying for discounts, bonuses, closing costs, and other required expenses but before taxes regarding sales. 

An acquisition cost may also involve the percentage necessary to take over another corporation or buy from some other corporation a current business unit. In addition, the expenses incurred by a business in regards to the attempts involved in acquiring a new client can be described in an acquisition.

Thus, from the above we can conclude that the correct option is B.