Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. acoounting for decision making please try to solve

acoounting for decision making please try to solve it fully.. Assignment 2 - Problem...

80.2K

Verified Solution

Question

Accounting

image

acoounting for decision making

please try to solve it fully..

Assignment 2 - Problem 2 ABC Inc. is proposing a change in its credit policy to increase sales of Product XYZ Existing terms is 1/10, net 30 New terms is 2/20, net 40 $ $ New sales level (all credit sales) Original sales level (all credit sales) Contribution Margin ration % bad debt losses on new sales level % bad debt losses on original sales level New average collection period (days) Original average collection period (days) Cost of Capital Cost of Goods sold as a percentage of sales 24,000,000 20,000,000 30% 5% 2% 26 15 10% 60% ABC also anticipates to have keep additional inventory. The inventory turnover rate would improve with new sales. Inventory tumover on new sales level 10 Inventory tumover on original sales level 5 Financing cost for Working Capital is 10% Tax rate 40% Current Liabilities for XYZ zero dollars Before credit policy changes, 75% of the customers takes the early payment discount Anticipate only 70% of the customers would take the discount after the change. What is net annual benefit of changing to the new credit policy

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Q

MVP, Inc., has produced rodeo supplies for over 20 years. The company currently has a debt-equity...

Finance
Q

find missing sides, angles and area of spherical triangle. if you cannot indicate that it cant...

Advance Math
Q

Consider the company that you selected from the Fortune 500 and Analyze the current situation of...

Operations Management
Q

Short Essay 7 Case Study: Baby Kelly’s Parents The case of Baby Kelly began in our...

Psychology
Q

Design an active high pass filter with a high frequency gain of 5 and a cutoff...

Electrical Engineering
Q

A spring of spring constant 5 x 10 N m is stretched initially by 5...

Physics
Q

A thermodynamic system undergoes cyclic process ABCDA as shown in figure The work done by...

Physics
Q

Expand and simplify (2x + 5) $ using Pascal's triangle. Show and EXPLAIN all steps...

Geometry
Q

The magnitudes and directions of two forces acting at a point P are given in...

Geometry
Q

Same-sex marriage: In a recent ABC News/Washington Post poll, 1,016 adults nationwide answered thequestion, "Overall,...

Basic Math
Q

Required information [The following information applies to the questions displayed below.] The following data reports...

Accounting
Q

Need answers for both this is a Multistep question. All of the following represent...

Accounting