NAMA Financial Management & Pricing 3

Question 1

A vending route generates $8,000/month in revenue. Fixed costs are $2,000 and variable costs are 45% of revenue. What is the monthly operating profit?

Accepted Answer

$2,400

Answer

Operating profit = $8,000 - $2,000 - ($8,000 × 0.45) = $8,000 - $2,000 - $3,600 = $2,400.

Question 2

Which term describes the minimum level of sales a vending location must generate to justify keeping a machine there?

Accepted Answer

Break-even point

Answer

The break-even point is where a location's revenue exactly covers the costs of servicing it, below which the machine is unprofitable.

Question 3

What does ROI stand for and how is it calculated in vending?

Accepted Answer

Return on Investment; net profit divided by total investment cost

Answer

ROI (Return on Investment) = Net Profit / Total Investment Cost, expressed as a percentage.

Question 4

A vending machine purchased for $3,500 has a 7-year useful life and no salvage value. Using straight-line depreciation, what is the annual depreciation expense?

Accepted Answer

$500

Answer

Annual depreciation = $3,500 / 7 years = $500 per year.

Question 5

In vending pricing, what is a 'value-added' pricing approach?

Accepted Answer

Pricing based on the perceived benefit or convenience delivered to the customer

Answer

Value-added pricing sets prices according to the convenience, accessibility, or unique benefits that vending provides to the customer.

(NAMA) National Automatic Merchandising Association Certification Practice Test

(NAMA) National Automatic Merchandising Association Certification Practice Test

NAMA Financial Management & Pricing 3