Credit terms should be attached to every credit sale, indicating payment dates, early payment discounts, and consequences for late payment or breach of terms. Understanding your customers‘ creditworthiness is also important, especially for high-risk credit sales involving large sums of money. All business owners know that it is a difficult task to keep track of […]
Capital Budgeting: Important Problems and Solutions Formula
Capital outlay funds are monies set aside by a company to invest towards the purchase of new capital assets or the improvement of existing ones. Examples of capital budgeting include purchasing and installing a new machine tool in an engineering firm, and a proposed investment by the company in a new plant or equipment or […]
Capital Budgeting: Definition, Methods, and Examples
Outlay costs, sometimes referred to as explicit costs, are direct expenses paid. Direct costs can also be predictable, e.g. rent, or vary, such as utility bills. Instead, the company will gradually report the expense on its financial statements over the useful life of the asset for which the capital expenditure was made. Budget authority, obligations, […]