Question
1. Waldron is considering selling to a group of new customers that will bring in sales of $16,000,000 with a bad debt percentage of 15%.
1. Waldron is considering selling to a group of new customers that will bring in sales of $16,000,000 with a bad debt percentage of 15%. Waldron will have collection costs of $288,000 and C/G/S & selling expenses of 70% of sales. They have tax rate of 30%. The only additional investment they will have is in accounts receivable in which they turnover of 4. Their return on investment will be:
A. 9.24%
B. 36.96%
C. 34.32%
D. 8.58%
2. Sleeter Company has determined that based on their Economic Order Quantity they will have an EOQ of 380,000 units for one of their main products. They have carrying costs of $.75 per unit and will maintain an additional safety stock of 4,000 units. They will have total carrying costs of what for the year?
A. $72,750
B. $145,500
C. $72,000
D. $144,000
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