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Warranties are usually for 1 year and usually manufacturers build warranties in their product as a sale feature. Warranty term is 1 year but sales go year around. If a customer buys in Feb year after in Feb warranty expires again another customer buys it in May , Apr, Dec...etc warranty expires 1 year after. So the warranty is 1 year for purchaser not for the seller as long as the seller lifts offering of 1 year warranty. So for the seller offering warranty doesn't expire.
Warranty is a contingent liability. So looking at this perspective would you think warranty is a financial instrument? It is a legal agreement and it has a monetary value ( & risk) if the good is returned. Going forward , would you look at it as an investment? The company, to attract the sales in a competitive market offers warranty so this is a selling future ( investment ) as well customers have the option of returning the good for replacement or repair (risk).
Thank you for your help..
Warranty is a contingent liability. So looking at this perspective would you think warranty is a financial instrument? It is a legal agreement and it has a monetary value ( & risk) if the good is returned. Going forward , would you look at it as an investment? The company, to attract the sales in a competitive market offers warranty so this is a selling future ( investment ) as well customers have the option of returning the good for replacement or repair (risk).
Thank you for your help..
Warranties....................…
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