Managers: Pricing Decisions and Investments
Not what you're looking for?
1) Managers should base pricing decisions on both cost and market factors. In addition, they must also consider legal issues. Describe the influence that the law has on pricing decisions.
2) "It is impossible to use DCF methods for evaluating investments in research and development. There are no cost savings to measure, and we don't even know what products might come out of our R andD activities." This is a quote from an R and D manager who was asked to justify investment in a major research project based on its expected net present value. How would you respond to this statement? Do you agree or disagree? Explain.
Purchase this Solution
Solution Summary
This response discusses the influence that law has on pricing decisions and the importance of considered the expected net present value.
Solution Preview
1) Legal considerations certainly play a role in pricing. I can think of the following examples:
a) Price discrimination: It is illegal for firms to set different prices based on certain factors.
b) Sell below costs: It is illegal for firms to sell products below their costs in order ...
Purchase this Solution
Free BrainMass Quizzes
Managing the Older Worker
This quiz will let you know some of the basics of dealing with older workers. This is increasingly important for managers and human resource workers as many countries are facing an increase in older people in the workforce
Writing Business Plans
This quiz will test your understanding of how to write good business plans, the usual components of a good plan, purposes, terms, and writing style tips.
Cost Concepts: Analyzing Costs in Managerial Accounting
This quiz gives students the opportunity to assess their knowledge of cost concepts used in managerial accounting such as opportunity costs, marginal costs, relevant costs and the benefits and relationships that derive from them.
Balance Sheet
The Fundamental Classified Balance Sheet. What to know to make it easy.
Understanding the Accounting Equation
These 10 questions help a new student of accounting to understand the basic premise of accounting and how it is applied to the business world.