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Select yes for those statements that accurately identify the chief elements of Costcos strategy, and no for those that do not.

• Individual members of wholesale clubs have essentially no power or leverage to bargain with a wholesale club over the prices they will pay or over other terms and conditions of sale.
• Because a member's switching costs are relatively low, they have greater bargaining power.
• The number of buyers/members is small and not numerous, and they buy in relatively small quantities.
• Buyers can negotiate for lower prices when clubs are overstocked with certain merchandise.
• Wholesale clubs face little to no competitive pressure of any consequence stemming from the bargaining power of their members.
• Net sales increased from $31.6 billion in fiscal 2000 to $126.2 billion in fiscal 2017, equal to a compound average growth rate (CAGR) of 8.5% since 2000; this growth rate is respectable given the tough economic conditions that existed from 2008-2016.
• Long-term debt decreased substantially in 20162017 and remains comfortably below stockholders equity.
• Total revenues (sales plus membership fees) increased from $32.2 billion in fiscal 2000 to $129.0 billion in fiscal 2017, equal to an average annual compound rate of 8.5% from fiscal 2000 through fiscal 2017.
• Net income rose from $631 million in 2000 to $2.71 billion in 2017, a compound average growth rate of 8.95%.
• Merchandise costs as a % of net sales increased slightly in recent fiscal years; lower in 2016 than any other year in Exhibit 1 and has been the lowest since 2000.
• Return on stockholders equity increased significantly in 2017 (primarily due to a jump in net income and a decline in stockholders equity due to modest repurchases of common stock).
• Selling, general, and administrative expenses have decreased since fiscal 2000.
• The current ratio decreased from 1.22 in 2014 to 1.05 in 2015 and eroded a bit further to 0.99 in fiscal 2017, but it is not alarmingly low.
• From fiscal 2005 through fiscal 2017, total revenues grew at a CAGR of 6.71% in the United States.
• From fiscal 2005 through fiscal 2017, operating income grew at a CAGR of 7.05% in the United States.

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