Question

Which of the following can have a negative impact on a sale's profitability?

A. Number of required sales contacts (phone calls, visits, etc.).
B. Special shipping instructions.
C. Accounts receivable collection time.
D. Purchase-order changes.
E. All of the above.

Answer 1

Factors that can negatively impact the profitability of a sale include numerous required sales contacts, special shipping instructions, lengthy accounts receivable collection times, and purchase-order changes; all have the potential to add costs or delay revenue.

Step-by-step explanation:

The profitability of a sale can be negatively impacted by several factors. All options provided, namely number of required sales contacts, special shipping instructions, accounts receivable collection time, and purchase-order changes, can each have their own detrimental effect on the profitability of a sale. The number of required sales contacts involves labor and possibly travel costs, which can add up and reduce the margin on a sale.

Special shipping requirements can incur additional costs, particularly if they involve expedited or international arrangements. The longer it takes to collect receivables, the more it costs a business in terms of cash flow and potential interest, thus affecting profitability. Lastly, changes to purchase orders can lead to increased administrative work, product restocking, and potential delays, all of which also diminish profits. Therefore, the answer is E. All of the above.