How to Calculate Average Collection Period: Formula, Calculator, and Key Insights

When a company sets strict credit terms, it may deter potential clients who prefer more lenient payment schedules. Conversely, overly generous credit terms might attract customers looking to capitalize on favorable payment conditions. In both cases, striking the right balance becomes essential for businesses aiming to maximize customer satisfaction and maintain healthy relationships. Improving Average […]

Relevant and irrelevant costs definition, explanation, examples

Incremental cost refers to the increase in cost when choosing an alternative. Classifying costs as either irrelevant or relevant is useful for managers making decisions about the profitability of different alternatives. Costs that stay the same, regardless of which alternative is chosen, are irrelevant to the decision being made. Relevant cost is a term used […]

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