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    pricing decisions

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    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 Discounted Cash Flow 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&D activities." This is a quote from an R&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.

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    Solution Preview

    Law influences pricing decisions in certain situations. For example, antitrust laws impact pricing decisions of firms operating in monopoly like situations. Similarly, in international trade, firms are prohibited to engage in dumping or predatory ...

    Solution Summary

    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.

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