Question
4- A manufacturer currently prices its product at 10 $ per unit. Last year, the manufacturer sold 60.000 units. The variable cost per unit is
4- A manufacturer currently prices its product at 10 $ per unit. Last year, the manufacturer sold 60.000 units. The variable cost per unit is 6 $. Total fixed costs are 120.000 $. The manufacturer intends to increase sales by 5%. Current accounts receivable collection period is 30 days. If the manufacturer wants to relax its credit standards, the expectation is that bad debt expenses will increase from 1% of sales to 2% of sales. The opportunity cost of investing in accounts receivables is 15%. In order to benefit from relaxing its credit standards, what would be the expected maximum accounts receivable collection period? (Assume that existing customers are not expected to alter their payment habits. 1 year = 365 days)
- 82,38 days
- 63,33 days
- 105,82 days
- 63,73 days
5- A company has an annual demand of 16,000 products. The products cost 2 $ each. Ordering and transport costs amount to 200 $ per order. The annual cost of holding one product in stock is estimated to be 1.20 $. Assume that the company adopts the EOQ as its order quantity and it has to have half of the EOQ as inventory on hand when an order is placed. How many weeks does it take for an order to be delivered to the company? (1 year = 52 weeks)
- 2
- 3
- 4
- 5
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