As treasurer of the Universal Bed Corporation, Aristotle Procrustes is worried about his bad debt...
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Accounting
As treasurer of the Universal Bed Corporation, Aristotle Procrustes is worried about his bad debt ratio, which is currently running at 6.5\%. He believes that imposing a more stringent credit policy might reduce sales by 5% and reduce the bad debt ratio to 4.5%. Assume current sales are $100. a. If the cost of goods sold is 75% of the selling price, what is the expected profit on the current credit policy? Note: Do not round intermediate calculations. Round your answer to 2 decimal places. b. If the cost of goods sold is 75% of the selling price, what is the expected profit on the more stringent credit policy? Note: Do not round intermediate calculations. Round your answer to 2 decimal places. c. Should Mr. Procrustes adopt the more stringent policy
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