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I have gotten several of the anwers as shown above, but having trouble with these remaining questions The net profit or loss from implementing the
I have gotten several of the anwers as shown above, but having trouble with these remaining questions
The net profit or loss from implementing the proposed plan is $_______
Cost of marginal bad debts:
bad debts, proposed plan $_______.
bad debts, present plan $_________
Net benefit from implementing proposed plan $___________
Should the proposal be recommended?
Shorteaing the credit period A firm is contemplating shortening its credit period from 35 to 25 days and believes that, as a result of this change its average collection period will decline from 41 to 33 days. Bad-debt expenses are expected to decrease from 1.6% to 0.9% of sales. The firm is currently selling 11,600 units but believes that as a result of the proposed change, sales will decline to 9,500 units. The sale price per unit is $58, and the variable cost per unit is $47. The firm has a required return on equal-risk investments of 24.4%. Evaluate this decision, and make a recommendation to the firm. (Note: Assume a 365-day year.) The reduction in profit contribution from a decline in sales is $-23,100 . (Round to the nearest dollar. Enter as a negative number.) The benefit from the reduced marginal investment in AR is $ 5,097(Round to the nearest dollar.) The cost savings from the reduction in bad debts is S 5,806. (Round to the nearest dollar.) The net profit or loss from implementing the proposed plan is s Round to the nearest dollar. Enter a negative number for a loss.) the proposed plan is(Round to the nearest dollar. EnterStep by Step Solution
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