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Pricing Decisions

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Why are Pricing decisions very important to an organization?

Pricing decisions are very important decisions organizations need to make. It can make or mar a business. If prices are too high, there is a tendency that consumers avoid your products and move on to similar products with lower prices. On the other hand, if prices are too low, to the point of not being able to cover your average variable costs or fixed costs, you might need to shut down your business.
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Cost Volume Profit Analysis (CVP analysis)

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CVP Analysis

This is a very powerful tool in management accounting. Its main purpose is to help management understand the relationship among cost, volume and profit, and management uses the information derived from the analysis  to make sound business decisions regarding products to be produced and sold, prices to be charged for the product, cost structure to maintain, marketing strategy to adapt and so much more.
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Business Cycle

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What is a business cycle?

Simply put, a business cycle refers to the fluctuations in economic activity. Little did you know how important the monthly employment report issued by the Bureau of labor statistic is to investors and portfolio managers. The two most important variables used to determine which phase an economy is in, in the business cycle is the Real GDP (Gross Domestic Product) of the economy and the rate of employment. So you see why the information on employment provided by the bureau of labor statistics is very important.
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Annuity (Present value and future value)

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What is an annuity?

In the previous discussion of time value of money (present value and future value), we derived the formula for a single payment that would be discounted or compounded respectively over a period of time (n) at an interest rate r. What if we have a series of payments of a fixed amount for a specified number of periods? Then we need to use a present or future value of an annuity formula.
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Dating : Courtship process

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Dating : Courtship process

Dating or courtship : What is dating?  Dating is patterns of behavior associated with adolescent entertainment and recreation. They are ultimately related to the import business of selecting a marriage mate. The process of selecting a marriage mate starts from dating, then going steady, engagement, and finally marriage. “date” the event and the person one goes out with or “person dated”. Date is an end to itself with no further commitment. It is primarily recreational and lasts for a short period of time.
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Time value of money

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Time value of money

It is said that as dollar today is worth more than a dollar to be received tomorrow or at a later date. This is due to the uncertainty that it would actually be received tomorrow and some other variables such as inflation, interest rate and so on. It is only natural to prefer certainty over uncertainty that is why most people prefer to receive money now than to be promised the same at a later date in the future.
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