a What would be the incremental bad debt losses if the change were made b What would be the incremental cost of carrying receivables if this change were made c What are the incremental pre tax profits from this proposal Cost of carrying receivables DSO ( Sales Day ) ( Variable cost ratio ) ( Cost of funds )

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a . What would be the incremental bad debt losses if the change were made? b . What would be the incremental cost of carrying

.

What would be the incremental bad debt losses if the change were made?

.

What would be the incremental cost of carrying receivables if this change were

made?

.

What are the incremental pre

-

tax profits from this proposal?

Cost of carrying receivables

=

DSO

(

Sales

/

Day

) (

Variable cost ratio

) (

Cost of funds

)

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