Question
based in Quebec, Les Dents Bleu is a well-known and reputable manufacturer of Bluetooth circuit boards for telecommunications devices. The company is looking to expand
based in Quebec, Les Dents Bleu is a well-known and reputable manufacturer of Bluetooth circuit boards for telecommunications devices. The company is looking to expand its sales to the personal speaker market. While the firm expects an extra $1,800,000 in sales if it enters this market, it also knows that 15% of its sales will ultimately be uncollectible. on addition, collection costs will be 2% an all new sales. The firms production costs are 65% of sales. Selling expenses are 12% of sales and that have an opportunity cost of funds (before tax) of 15%. They can turn receivables five times per year. Should they enter the personal speaker market?
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