Allocative efficiency of a product is achieved when parties are able to use the accurate and readily available data reflected in the market to make decisions about how to utilize their resources
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Answer:
2. when performance obligations are satisfied.
Explanation:
Franchise fee is paid to the franchisor to become part of the franchise.
Obligations by the franchisor are satisfied when:
1. When the franchisor does not have any financial repayments to make.
2. Initial services are all performed, for example some agreements require franchisor to train new franchise staff.
Usually franchise fee is paid upfront, and then regular payments areade by the franchise to the franchisor to remain a member.
According to a major study commissioned by the Advertising Research Foundation, the information and advice consumers need to make a purchase comes to them unsolicited when they are in a passive shopping mode. There are two kinds of shopping mode which represent consumers' behavior. Passive and active are these two kinds. Consumers who do not actively<span> seek the information is passive customers. Thus passive is the suitable answer.</span>
Answer:
b. He will prefer $85 two years from now.
Explanation:
Before making the choice, lets first calculate the present values of these cash flows,
PV factors @ 10% are as follows,
Year 1 = 0.909
Year 2 = 0.8265
Year 3 = 0.7513
Present value of 75 = 75 * 0.909 = 68.175
Present value of 85 = 85 * 0.8265 = 70.25
Present value of 90 = 90 * 0.7513 = 67.617
A rational individual thus would chose $85 two years from now as it yields the max present value.
Hope that helps.