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Pachacha [2.7K]
2 years ago
5

The use of short-term incentives to encourage the purchase or sale of a product or service is called ________.

Business
1 answer:
leva [86]2 years ago
7 0

The use of short-term incentives to encourage the purchase or sale of a product or service is called sales promotion.

Sales promotion can be defined as the strategy of using annual incentives to attract customers so as to increase the sales of goods and services.

Most companies make use of sales promotion to increase their sales in  order to generate more revenue as well as to promote their products.

Sales promotion is important as it enables companies to advertise their products or to create products awareness to customers.

Inconclusion the use of short-term incentives to encourage the purchase or sale of a product or service is called sales promotion.

Learn more about sales promotion <em>here:brainly.com/question/13975307</em>

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Explanation:

The adjusting entry is shown below:

Insurance expense Dr $1,800

       To Prepaid insurance $1,800

(Being the insurance expense is recorded)

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3 years ago
Stock A is expected to provide a dividend of $13.4 a share forever. Stock B is expected to pay a dividend of $6.7 next year. The
mash [69]

Answer: Stock A is expected to provide a dividend of $13.4 a share forever  which means it is a perpetuity. The market capitalization is 10% which means that 10% is the required rate of return. The formula to find the value of a perpetuity is Cash Flow/Rate

The cash flow is 13.4 and rate is 10% so 13.4/0.1= $134

The present value of Stock A is $134

Stock B is expected to pay a dividend of $6.7 next year and then have a constant growth rate of 6% forever, so we can find what the present value of Stock B will be next year using the DDM method and then discount that value to this year.

1 year from now dividend = 6.7

Growth = 4%

R= 10%

Formula = D*(1+G)/R-G

= 6.7*(1+0.04)/0.1-0.04=116.113

Now we need to discount 116.113 back one year so 116.113/1.1= 105.57

The present value of Stock B is 105.57

For stock C the next year dividend is 6.7 and then for 5 years the growth rate is 20% and then 0 forever so we need to find the value of stock C 6 years from now and then discount it back.

Dividend 1 year from now = 6.7

Dividend 6 years from now= 6.7* (1.2)^5=16.67

Value of stock 6  years from now

D= 16.67

G= 0

R= 10

16.67*(1+0)/(0.1-0)

=166.7174

Now we need to discount back this value 6 years to find the present value of the stock

166.7174/1.10^6

=94.10

The highest present value at a market capitalization of 10% for each stock is of stock A which is $134

Explanation:

3 0
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