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I'm interested in the number 4. How would I put my recommendation to the CEO of Eboy Corporation? C D Analysis of Initiating a Cash
I'm interested in the number 4. How would I put my recommendation to the CEO of Eboy Corporation?
C D Analysis of Initiating a Cash Discount for Eboy Corporation 2 4 Increase in units due to discount Selling price @net 30 Variable Cost Per Unit 50.00 4,200.00 2,600.00 $ 80,000 (a.) 6 7 8 Additional Profit Contribution fro 10 Cost of Marginal Investment in A 12 Variable cost per unit Raw Material annual usage Accounts Receivable Sales Days Collection Period AR Turnover 1450 13 15 365 45.625 8.0 Average investment presently (w/c (b) 19 20 21 Variable cost per unit Raw Material annual usage 1500 23Expected AR Turnover due to discou 12.0 24 25 Average investment presently (wit (G) 26 27 Reduction in accounts receivablei (d.) 28 29Opportunity cost of funds 30 Cost Savings from reduced investment in $18,281 (e.) 31 32 12.5% Cash Discount term Percentage of customers to take # 34 Raw Material annual usage (new # 35 Selling price per unit 36 37 38 Net Profit (loss) from initiation of proposed $10,081 (g.) Cost of Cash Discount $88,200 (f.) Eboy Corporation FormularStep by Step Solution
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