2. If a firm is located at a central place resulting in higher sales, what will be its
effect on goodwill of the firm?
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Answer:
Locational factor
Explanation:
If the firm is centrally located or located in a very prominent place, it can attract, more customers resulting in an increase in turnover. Therefore, locational factor should always be considered while ascertaining the value of goodwill.
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Yes eg
Apple, They are charged higher than normal ones in the market and people pay. If a person sells apples, even in the middle of a highway , a person would only buy it once and that too if there is nothing else around.
The ultimate factor in deciding the goodwill of the company would always boil down to one thing only. Service.
So though it might see a bump in sales due impulsive buys in the start, if the product or service is not good enough, it will simply die out because of the competition.
Apple, They are charged higher than normal ones in the market and people pay. If a person sells apples, even in the middle of a highway , a person would only buy it once and that too if there is nothing else around.
The ultimate factor in deciding the goodwill of the company would always boil down to one thing only. Service.
So though it might see a bump in sales due impulsive buys in the start, if the product or service is not good enough, it will simply die out because of the competition.
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