Question
Considering the difficult situation due to the Covid-19 pandemic, Healthy World Co. plans to change its cash sales policy to a net 30 day credit.
Considering the difficult situation due to the Covid-19 pandemic, Healthy World Co. plans to change its cash sales policy to a net 30 day credit. Currently, the company is able to sell 2,000 units of its products per month. The selling price and variable costs per unit are IDR 15,000 and IDR 12,000, respectively. The new credit policy is expected to increase sales by 14%. The company also estimates that by implementing the new credit policy, the selling price of its products could increase to IDR 16,500 units, while variable costs will increase by 7%. If the desired yield is 1.25% per month, should Healthy World Co. change its credit policy? Explain.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started