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Terms of payment vary broadly in practice. At one conclusion, if the seller has financial resources, she or he may extend liberal credit to the buyers, conversely the buyer pays in advance and finances the whole trade cycle. The terms of credit differ for various industries and are dictated through prevailing trade practices. Generally, businesses operating in monopoly environment will require advance or cash payment while business operating in a competitive environment will expand credit to the buyers. The main terms of payment are as listed as given below:
Cash Terms
While goods are sold on cash terms, the sales consideration or say payment is received either before goods are sold as advance payment or while the goods are delivered as cash on delivery Cash term usually exist under the subsequent conditions:
(a) While goods are made to order
(b) While the buyer is perceived to be less credit worthy
(c) The seller is in strong bargaining position.
Queuing problems There are two main approaches to queuing problems: • simulation • queuing theory formula Where simple situations apply, queuing theory should be used
Limitation of break even charts Despite many advantages a break even chart suffers from the following limitations: 1) A break even chart is based upon a number of assumption
Working Capital management is affected through two characteristics of current assets that are as follows (i) short life span (ii) swift transformation in the other asset forms.
Q.Process of Pricing in maturity period? Maturing periods is the third stage in the life cycle of a product. If is a stage between growth period and decline period of sales. So
MAKE A TRADING ACCOUNT
Sales of Cool-Man air conditioners have increase steadily during the past five years: Year Sales 1 450 2 495 3 518 4 563 5 584 6 ?
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meaning standard costing
What are the Limitation of performance budgeting 1) It dose not facilitate qualitative evaluation. 2) The success depends on the well organized departments, but this may not b
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