Cash discount 5% for payments with 10 days

30% DEBTOS ARE EXPECTED TO TAKE THE CASH DISCOUNTS

Sales 60^ epected to be on credit

50% of sales on credit

Sales price per unit is $50 AND VARIABLE COST PER UNIT IS $35

Proposed relaxation standards, sales are expected to increase from 10 000 to 12 000 units

Bad debt increase 2% to 4% of credit sales

Return on equal risk investment is 16% over 365 days a year

Calculate

Additional profit of sales

Cost of marginal bad debts

Cost of cash discount