Answer:
A) Accounts receivable turnover ratio = Net credit sales / Average accounts receivable
The following table shows the accounts receivable turnover ratio of MCB and ABI:
Particulars MCB ABI
Net sales $8320 $17400
Average Accounts Receivable $720 $900
Accounts Receivable Turnover rate 11.5 19.3
B)
Day's sale outstanding = Accounts receivable / Total credit sales × 365
The following table shows the days sale outstanding of MCB and ABI:
Particulars MCB ABI
Net sales $8,320 $17,400
Average Accounts Receivable $720 $900
Day's sale outstanding 31.58 18.88
Explanation:
Answer:
D. Switching cost strategy
Explanation:
The software manufacturer has incorporated the use of switching cost strategy by making it difficult for customers to substitute their software product for another.
Switching costs: it is also known as switching barrier. This is a the cost incurred by the customer as a result of changing brands, product, services or suppliers.
The higher the cost of switching; the lesser a customer would be willing to switch between brands, the lower the switching cost; the higher the customer would be willing to switch between brands.
Switching cost includes:
• Psychological cost: This is the cost of a customer deciding whether the new product or services would be better than the old product
• Effort-based cost: This refers to the effort a customer will put in while switching brands such as the paperwork involved.
• Time cost: The amount of time used while a customer is switching product
Strategies used by firms to discourage its customers from switching
1. Charging a high cancellation fee for service cancellations.
2. Adopting a lengthy cancellation process for service cancellations.
3. Requiring significant paperwork for service cancellations.
Answer:
The correct answer to the following question will be "Consolidation".
Explanation:
- Obligation restructuring is an investment strategy, merging bills into some kind of single debt paid out by a lender via a management plan. Debt consolidation is particularly effective in heavy-interest debt, such as credit card payments.
- Debt restructuring is a form of financial refinancing that involves taking out a loan to cover off so many others.
- This is usually referred to as a personal finance mechanism for people working in high mortgage debt, but sometimes it could also refer to a monetary solution of the country to the restructuring of corporate bonds or government borrowing.
Therefore, Consolidation is the right answer.
Answer:
Corporate shareholders escape liability for the firm's debts, but this factor may be offset by the tax disadvantages of the corporate form of organization
Explanation:
