{ "key_pair_value_system": true, "answer_rating_count": "", "question_feedback_html": { "html_star": "", "html_star_feedback": "" }, "answer_average_rating_value": "", "answer_date_js": "2024-06-28T04:39:30-04:00", "answer_date": "2024-06-28 04:39:30", "is_docs_available": null, "is_excel_available": null, "is_pdf_available": null, "count_file_available": 0, "main_page": "student_question_view", "question_id": "4240246", "url": "\/study-help\/questions\/apollo-data-systems-is-considering-a-promotional-campaign-that-will-4240246", "question_creation_date_js": "2024-06-28T04:39:30-04:00", "question_creation_date": "Jun 28, 2024 04:39 AM", "meta_title": "[Solved] Apollo Data Systems is considering a prom | SolutionInn", "meta_description": "Answer of - Apollo Data Systems is considering a promotional campaign that will increase annual credit sales by $600,000. The comp | SolutionInn", "meta_keywords": "apollo,data,systems,promotional,campaign,will,increase,annual,credit,sales,$600,000,company", "question_title_h1": "Apollo Data Systems is considering a promotional campaign that will increase annual credit sales by $600,000. The company will require investments in accounts receivable, inventory,", "question_title": "Apollo Data Systems is considering a promotional campaign that will increase annual", "question_title_for_js_snippet": "Apollo Data Systems is considering a promotional campaign that will increase annual credit sales by $600,000 The company will require investments in accounts receivable, inventory, and plant and equipment The turnover for each is as follows Credit policy decision with changing variables (LO4) Continuation of problem 18 (LO4) and return on investment (LO4) Credit policy Accounts receivable 5x Inventory 8x Plant and equipment 2x All $600,000 of the sales will be collectible However, collection costs will be 3 percent of sales, and production and selling costs will be 77 percent of sales The cost to carry inventory will be 6 percent of inventory Depreciation expense on plant and equipment will be 7 percent of plant and equipment The tax rate is 30 percent a Compute the investments in accounts receivable, inventory, and plant and equipment based on the turnover ratios Add the three together b Compute the accounts receivable collection costs and production and selling costs and add the two figures together c Compute the costs of carrying inventory d Compute the depreciation expense on new plant and equipment e Add together all the costs in parts b, c, and d f Subtract the answer from part e from the sales figure of $600,000 to arrive at income before taxes Subtract taxes at a rate of 30 percent to arrive at income after taxes g Divide the aftertax return figure in part f by the total investment figure in part a If the firm has a required return on investment of 12 percent, should it", "question_description": "Apollo Data Systems is considering a promotional campaign that will increase annual credit sales by $600,000. The company will require investments in accounts receivable, inventory, and plant and equipment. The turnover for each is as follows: Credit policy decision with changing variables (LO4) Continuation of problem 18 (LO4) and return on investment (LO4) Credit policy Accounts receivable . . . . . . . . 5x Inventory . . . . . . . . . . . . . . . . . 8x Plant and equipment . . . . . . . . 2x All $600,000 of the sales will be collectible. However, collection costs will be 3 percent of sales, and production and selling costs will be 77 percent of sales. The cost to carry inventory will be 6 percent of inventory. Depreciation expense on plant and equipment will be 7 percent of plant and equipment. The tax rate is 30 percent. a. Compute the investments in accounts receivable, inventory, and plant and equipment based on the turnover ratios. Add the three together. b. Compute the accounts receivable collection costs and production and selling costs and add the two figures together. c. Compute the costs of carrying inventory. d. Compute the depreciation expense on new plant and equipment. e. Add together all the costs in parts b, c, and d. f. Subtract the answer from part e from the sales figure of $600,000 to arrive at income before taxes. Subtract taxes at a rate of 30 percent to arrive at income after taxes. g. Divide the aftertax return figure in part f by the total investment figure in part a. If the firm has a required return on investment of 12 percent, should it", "transcribed_text": "", "related_book": { "title": "Income Tax Fundamentals 2013", "isbn": "1111972516, 978-1285586618, 1285586611, 978-1285613109, 978-1111972516", "edition": "31st Edition", "authors": "Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill", "cover_image": "https:\/\/dsd5zvtm8ll6.cloudfront.net\/si.question.images\/book_images\/1124.jpg", "uri": "\/textbooks\/income-tax-fundamentals-2013-31st-edition-9781285586618", "see_more_uri": "" }, "free_related_book": { "isbn": "146715427X", "uri": "\/textbooks\/lady-undertakers-of-old-texas-1st-edition-978-1467154277-263863", "name": "Lady Undertakers Of Old Texas", "edition": "1st Edition" }, "question_posted": "2024-06-28 04:39:30", "see_more_questions_link": "\/study-help\/questions\/business-banking-2021-September-12", "step_by_step_answer": "The Answer is in the image, click to view ...", "students_also_viewed": [ { "url": "\/members-of-the-board-of-directors-of-control-one-have-242661", "description": "Members of the board of directors of Control One have received the following operating income data for the year ended March 31, 2014: Members of the board are surprised that the industrial systems...", "stars": 3 }, { "url": "\/study-help\/coaching-supervision-a-practical-guide-for-supervisees\/do-you-think-that-boundaryless-work-is-primarily-advantageous-for-1980153", "description": "Do you think that boundaryless work is primarily advantageous for employees or are there potential disadvantages for employees as well?", "stars": 3 }, { "url": "\/a-mail-order-house-uses-18000-boxes-a-year-carrying", "description": "A mail- order house uses 18,000 boxes a year. Carrying costs are 60 cents per box a year, and order-ing costs are $ 96. The following price schedule applies. Determine a. The optimal order quantity....", "stars": 3 }, { "url": "\/study-help\/questions\/lighlands-company-uses-the-weightedaverage-method-in-its-process-costing-9847675", "description": "lighlands Company uses the weighted-average method in its process costing system. It processes wood pulp for various nanufacturers of paper products. Data relating to tons of pulp processed during...", "stars": 3 }, { "url": "\/study-help\/questions\/kim-le-is-the-senior-accountant-on-the-brothers-manufacturing-6149035", "description": "Kim Le is the senior accountant on the Brothers Manufacturing Ltd. (BML) audit for the year ended December 31, 2020. This is Kims second year on the engagement. BML has traditionally produced custom...", "stars": 3 }, { "url": "\/study-help\/questions\/7-public-goods-20-points-some-analysts-see-the-north-4624227", "description": "7 Public Goods [20 points} Some analysts see the North Atlantic Treaty Organization (NATO) as a provider of a public good called \"common security\\\" to its members. Suppose we measure security in...", "stars": 3 }, { "url": "\/study-help\/questions\/your-company-is-trying-to-decide-on-one-of-2-6370619", "description": "Your company is trying to decide on one of 2 options for a process improvement device. This device would improve the company process monetarily. See below for improvements: device original cost...", "stars": 3 }, { "url": "\/study-help\/questions\/8-15-pts-a-state-has-just-adopted-the-following-1000866", "description": "8) (15 pts) A state has just adopted the following state income tax: no tax on the first $25,000 earned, 2% on the next $25,000 earned and 3% of all additional earnings. Write a multiline function...", "stars": 3 }, { "url": "\/study-help\/questions\/2-rewrite-the-given-infinite-sum-as-an-integral-then-1005369", "description": "2. Rewrite the given infinite sum as an integral, then use Desmos or your graphing calculator to evaluate the integral. Justify your answer. 3 lim 11700 (3) +4 (-1) () 3. Rewrite the given integral...", "stars": 3 }, { "url": "\/study-help\/questions\/youve-been-asked-to-review-the-overhead-rates-for-your-999466", "description": "You've been asked to review the overhead rates for your client, the Plexiglas Solution Co. Plexiglas manufactures standard-sized plexiglas protectors for grocery stores and banks. Plexiglas uses...", "stars": 3 } ], "next_back_navigation": { "previous": "\/study-help\/questions\/differentiate-between-the-occurrence-and-existence-assertions-how-do-both-4240245", "next": "\/study-help\/questions\/some-commentators-argue-that-the-twotiered-corporate-structure-with-a-4240247" }, "breadcrumbs": [ { "name": "Study help", "link": "https:\/\/www.solutioninn.com\/study-help\/questions-and-answers" }, { "name": "Business", "link": "https:\/\/www.solutioninn.com\/study-help\/questions-and-answers\/business" }, { "name": "Accounting", "link": "https:\/\/www.solutioninn.com\/study-help\/questions\/business-accounting" }, { "name": "Apollo Data Systems is considering a promotional campaign that will increase annual", "link": "https:\/\/www.solutioninn.com\/study-help\/questions\/apollo-data-systems-is-considering-a-promotional-campaign-that-will-4240246" } ], "skill_details": { "skill_id": "9", "skill_name": "Accounting", "parent_id": "1" } } } }