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agasfer [191]
3 years ago
10

What are the four key factors in a firm’s credit policy? How would a relaxed policy differ from a restrictive policy? Give examp

les of how the four factors might differ between the two policies. How would the relaxed versus the restrictive policy affect sales? Profits?
Business
1 answer:
Free_Kalibri [48]3 years ago
4 0

Answer:

Here are six factors that you ought to consider when building up a credit approach and that should impact your choice whether to stretch out credit to clients. You should allow credit just if the positives of doing so exceed the negatives. Regularly, this is hard to decide.  

The Effect on Sales Revenue  

The explanation you would allow credit in any case is so your clients can defer paying you. This is helpful for your clients and will most likely win clients for you, yet it isn't so advantageous for you and your primary concern, in any event on a quick premise. Deals income from the deal you made to your client will be deferred for either the markdown period or the credit time frame, or maybe more if the client is late in making the payment. The upside is that you might have the option to raise your costs on the off chance that you offer credit.  

You have an exchange off. The chance of more clients and higher deals costs in the event that you offer credit in return for conceivable postponed and late payments. Shockingly, it's difficult to evaluate this.  

The Effect on Cost of Goods Sold  

Regardless of whether you sell items or administrations you must have them accessible and, on account of items, in stock, when a deal is made. At the point when you expand credit, that implies paying for that item or administration so as to have it in stock however not getting paid for it promptly when it is bought. Despite the fact that you will in the long run get paid, your business must have enough income to make up for the deferred payment Furthermore, you lose any premium pay you may have earned on that cash.  

Once more, you have an exchange off. This time it is more clients and higher deal costs in return for lost premium salary and briefly lower income.  

The Probability of Bad Debts  

In the event that an organization makes every one of its deals for money, there is no chance of awful obligations or obligations it can't gather. In the event that any level of the organization's deals are using a credit card, there exists the chance of awful obligations or obligations you, as an entrepreneur, will never gather. At the point when you are building up your credit strategy, you ought to take into consideration some level of your credit accounts that will never be paid.  

The exchange off here is that some level of your credit deals will never be paid. You need to choose if this factor is worth more clients and higher deals costs.  

Offering a Cash Discount  

Especially when you offer credit on a business-to-business (B2B) premise, most organizations offer different organizations a money rebate. At the end of the day, if the business takes care of the tab inside the markdown period, that business gets a rebate. In the event that they don't pay inside the markdown period, at that point they should pay inside the credit time frame or the first time frame inside which the bill is expected.  

Money limits are regularly expressed like this model: 2/10, net 30. On the off chance that those are your credit terms, it implies that you offer a 2% markdown if the bill is paid in 10 days. On the off chance that you don't take the markdown, the bill is expected inside the multi day credit period.  

Is getting your cash in 10 days worth the 2% markdown that you offer? That is the exchange off you have with respect to money limits and whether you should offer them.  

Assuming Debt  

On the off chance that you, as an entrepreneur, choose to offer credit to your clients, odds are you should assume obligation to back your records receivables. As a private company, you will most likely be unable to stand to sell your items or administrations without quick payment except if you have a decent working capital base. In the event that you need to assume obligation, you need to factor in the expense of transient acquiring as a feature of your choice to offer credit.  

Offering credit to your clients is a major choice with wide-arriving at impacts for your organization. You need to consider the variables above and then some. Will offering credit bring about recurrent business? Do you have the opportunity and assets to gather late payments? Settle on this choice astutely.

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Sliva [168]

Answer:

The correct answer is letter "D": double taxation of distributed profits.

Explanation:

A Corporation is an entity, typically with specific characteristics of a large business. Corporations are considered to be separate legal entities from their owners. This implies double taxation for profits: <em>one filing for corporate taxes and the other individually when the profits are distributed</em>.

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3 years ago
A three-month HP put option with an exercise price of $60 sells for a premium of $8. The put is in the money only if the price o
Mkey [24]

Answer:

less than $60 per share

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A put option is the money when the exercise price is greater than the asset price, thus the put has to be less than $60

3 0
3 years ago
Read 2 more answers
A number between 1 and 15
alexgriva [62]

Answer:

The probability is 0.20 or 20%

Explanation:

we know that

The probability of an event is the ratio of the size of the event space to the size of the sample space.  

The size of the sample space is the total number of possible outcomes  

The event space is the number of outcomes in the event you are interested in.  

so  

Let

x------> size of the event space

y-----> size of the sample space  

so

P=\frac{x}{y}

In this problem we have  that

Multiple of 5 between 1 and 15 = 5, 10,15

so

x=3

Total numbers between 1 and 15=15

so

y=15

substitute

P=\frac{3}{15}=0.20

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8 0
3 years ago
When a tax is levied on a good, the buyers and sellers of the good share the burden, A. provided the tax is levied on the seller
Morgarella [4.7K]

Answer:

Here all of these options are wrong , the correct answer is regardless of how the tax is levied the burden of tax would be shared by both the seller and buyer.

Explanation:

Tax can be said as primary source of income for the government. When a tax is levied on the goods , the burden of that would have to be bear by both buyer and seller , irrelevant of how that levied . If the taxes are high then the demand by buyer would be less and seller would receive low price because less people would buy and n the case where taxes are low demand would be high and seller would receive high prices ,in both cases tax would be levied on both seller and buyer and how much it would be depends upon the elasticity of demand and supply. So all the statements given here are false or invalid.

6 0
2 years ago
Pell Corporation manufactures computers. Assume that Pell allocates manufacturing overhead based on machine hours estimated 10,0
Contact [7]

Answer:

exist 139,200

Explanation:

Assume that Pell allocates manufacturing overhead based on machine hours, estimated 10,000 machine hours and exist 87,000 that implies that the standard cost per machine hour = exist 87,000 / 10,000 = 8.7 exist

Therefore the manufacturing overhead costs if Pell actually used 16,000 machine hours will be: 16000 x 8.7 = exist 139,200

8 0
3 years ago
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