subject
Business, 24.06.2019 22:50 Aprillove7939

Proposal #1 would extend trade credit to some customers that previously have been denied credit because they were considered poor risks. sales are projected to increase by $160,000 per year if credit is extended to these new customers. of the new accounts receivable generated, 10% are projected to be uncollectible. additional collection costs are projected to be 2% of incremental sales (whether they actually end up collected or not), and production and selling costs are projected to be 78% of sales. your firm expects to pay a total of 40% of its income after expenses in taxes. 1) compute the incremental income after taxes that would result from these projections: 2) compute the incremental return on sales if these new credit customers are accepted: if the receivable turnover ratio is expected to be 4 to 1 and no other asset buildup is needed to serve the new customers… 3) compute the additional investment in accounts receivable 4) compute the incremental return on new investment 5) if your company requires a 20% rate of return on investment for all proposals, do the numbers suggest that trade credit should be extended to these new customers? explain.

ansver
Answers: 3

Another question on Business

question
Business, 21.06.2019 20:40
On december 31, 2011, daggett company issued $750,000 of ten-year, 9% bonds payable for $700,353, yielding an effective interest rate of 10%. interest is payable semiannually on june 30 and december 31. prepare journal entries to reflect (a) the issuance of the bonds, (b) the semiannual interest payment and discount amortization (effective interest method) on june 30, 2012, and (c) the semiannual interest payment and discount amortization on december 31, 2012. round amounts to the nearest dollar.
Answers: 2
question
Business, 21.06.2019 22:30
Before contacting the news or print media about your business, what must you come up with first ? a. a media expertb. a big budgetc. a track recordd. a story angle
Answers: 1
question
Business, 22.06.2019 11:10
Use the following account numbers and corresponding account titles to answer the following question. account no. account title (1) cash (2) merchandise inventory (3) cost of goods sold (4) transportation-out (5) dividends (6) common stock (7) selling expense (8) loss on the sale of land (9) sales which accounts would appear on the income statement?
Answers: 3
question
Business, 22.06.2019 17:00
During which of the following phases of the business cycle does the real gdp fall? a. trough b. expansion c. contraction d. peak
Answers: 2
You know the right answer?
Proposal #1 would extend trade credit to some customers that previously have been denied credit beca...
Questions
question
Mathematics, 08.05.2021 20:30
question
Mathematics, 08.05.2021 20:30
question
Chemistry, 08.05.2021 20:30
question
English, 08.05.2021 20:30
question
Chemistry, 08.05.2021 20:30
question
Mathematics, 08.05.2021 20:30
Questions on the website: 13722361