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can you answer question 4 and 5 Shortening the credit period Afrm is contemplating shortening its credit period from 40 to 30 days and belleves
can you answer question 4 and 5 Shortening the credit period Afrm is contemplating shortening its credit period from 40 to 30 days and belleves that, as a result of this change, its average collection period will decline from 46 to 36 days. Bad-debt expenses are expected to decrease from 1.6% to 0.9% of sales. The firm is currently selling 12,100 units but believes that as a result of the proposed change, sales will decline to 10,100 units. The sale price per unit is $55, and the variable cost per unit is $45. The firm has a required return on equal risk investments of 12.4%. Evaluate this decislon, and make a recommendation to the firm (Note Assume a 365 day year) The reduction in profit contribution from a decline in sales is s (Round to the nearest dollar. Enter as a negative number) The benefit from the reduced marginat Inventment in AMR is $ (Round to the nearent dollor) The cost savings from the reduction in bad debts is ? (Round to the nearest dollar) The net profit of loss from implementing the proposed plan is 5 (Round to the nearest dolar Enter a negative number for a loss) is the proposed plan recommended? (Select from the drop-down menu)
can you answer question 4 and 5
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