1. An increase in promotion budgets in CapSim will:

a) Have diminishing returns beyond $2 million.

b) Generate cummulative returns at any level.

c) Experience level returns.

d) Have no effect except on the Marketing Budget.

e) All of these are correct answers.

2. Net present value (NPV) does NOT consider:

a) The effects of asset depreciation and amortization.

b) Period expenses.

c) The time value of money.

d) The effect of taxes.

e) None of these is the correct answer.

3. Why would a buyer want an older product?

a) The product is priced lower.

b) Moore's Law.

c) The buyer does not like change.

d) The efficiency ratio is higher.

e) It is known for being around.