Question
A company is considering increasing its credit period to customers from one month to two months. Annual revenue is currently $1200000.It is expected that the
A company is considering increasing its credit period to customers from one month to two months. Annual revenue is currently $1200000.It is expected that the increased credit period would increase sales by 25% and result in an increase in profit of $45000 before any INCREASE in finance charges have been taken into account. The company’s cost of capital is 10%
What is the financial effect of this proposal after taking into account any increase in finance charges?
C.Increase in profit of $30000
D.Decrease in profit of $30000
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Answer Revised Receivables 1200000 25 x 2 12 250000 ...
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Materials and process in manufacturing
Authors: E. Paul DeGarmo, J T. Black, Ronald A. Kohser
9th edition
471656534, 978-0471033066, 471033065, 978-0471656531
