Question

Hector is opening an appliance store. He has estimated a monthly profit goal based on his anticipated expenses and earning goals and uses it to set product prices. Hector is implementing a ________ pricing strategy.

Answer 1

Answer:

target return on investment (ROI)

Explanation:

THESE ARE THE OPTIONS FOR THE QUESTION BELOW

A) penetration

B) price skimming

C) target return on investment (ROI)

D) competitor-based

E) value

From the question, we are informed about the Hector who is opening an appliance store. He has estimated a monthly profit goal based on his anticipated expenses and earning goals and uses it to set product prices. Hector is implementing a target return on investment (ROI) pricing strategy.

Target return on investment pricing model can be regarded as one in which price is determined by investor/Business based on what the business owner intend to make from his/her capital that is invested in the business. An investor can calculate Target return ccalculated as the money invested in a venture along as the profit that investor intend to see as return, which is been adjusted for the time value of money. As regards to return-on-investment method, It is required by the investor work in backward direction so as to to reach a current price for target return pricing.