Question

Steve owns a store that caters primarily to men and their hobbies. He is contemplating greatly expanding the hunting and fishing section of the store. If he does this, he expects his fishing and hunting sales will increase, his camping gear sales will increase, and his model train sales will decrease. Which of the following should Steve include in his revenue projection for the expansion project?
I. increase in fishing and hunting sales
II. increase in camping gear sales
III. decrease in model train sales

A. I only
B. II only
C. I and III only
D. II and III only
E.I, II, and III

Answer 1

Answer:

E) I, II, and III

Explanation:

It is a simple question that needs to take into account all the revenue generating activities and as such all the activities that is, the increased sale of fishing and hunting, the increased sale of camping gear and the reduced sales of model train need to be analyzed. This is because we are computing the net revenue effect of this business decision and in projections anything that increases the revenue or decreases the revenue need to be ascertained to make this projection a worthwhile decision information.

Hope this helps.