Given below are two statements:
Statement I: Easy financing schemes such as payment in instalments are commonly offered by marketers of consumer durables, such as electronic goods and automobiles.
Statement II: In a full finance @ 0% offer, the file charges may sometimes be nothing but interest recovered in advance.
In the light of the above statements, choose the correct answer from the options given below:
Answer & explanation
Correct answer: option 1
The correct answer is Option (1) → Both Statement I and Statement II are correct.
Statement I: Easy financing schemes such as payment in instalments are commonly offered by marketers of consumer durables, such as electronic goods and automobiles. — Correct. Marketers of consumer durables, such as electronic goods and automobiles, offer easy financing schemes, for example ‘24 easy instalments’. This sales promotion activity is called full finance @ 0%.
Statement II: In a full finance @ 0% offer, the file charges may sometimes be nothing but interest recovered in advance. — Correct. Under such an offer the buyer should look at the file charges. Sometimes these charges are nothing but interest recovered in advance. So the finance may not be free at all.
NCERT (2026-27 Edition): “Sales Promotion Sales promotion refers to short-term incentives, which are designed to encourage the buyers to make immediate purchase of a product or service. These include all promotional efforts other than advertising, personal selling and publicity, used by a company to boost its sales. Sales promotion activities include offering cash discounts, sales contests, free gift offers, and free sample distribution. Sales promotion is usually undertaken to supplement other promotional efforts such as advertising and personal selling. …” “Commonly used sales Promotion activities … 9. Full finance @ 0%: Many marketers of consumer durables such as Electronic goods, automobiles etc offer easy financing schemes such as ‘24 easy instalments, Eight Up Front and 16 To Be Paid as Post Dated Cheques’. However, one should be careful about the file charges, which sometimes is nothing but interest recovered in advance.” |