Parker Tool is considering lengthening its credit period from 30 to 60 days All customers will continue to pay on the net date The firm currently bills $460,000 for sales and has $300,000 in variable costs The change in credit terms is expected to increase sales to $520,000 Bad debt expenses will increase from 1 to 1 5 The firm has a required rate of return on equal risk investments of 20 a What additional profit contribution from sales will be realized from the proposed change b What is the cost of the marginal investment in accounts receivable c What is the cost of the marginal bad debts d Do you recommend this change in credit terms

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Parker Tool is considering lengthening its credit period from 30 to 60 days  All customers will continue to pay on the net date  The firm currently bills $460,000 for sales and has $300,000 in variable costs  The change in credit terms is expected to increase sales to $520,000  Bad debt expenses will increase from 1  to 1 5  The firm has a required rate of return on equal risk investments of 20   a  What additional profit contribution from sales will be realized from the proposed change  b  What is the cost of the marginal investment in accounts receivable   c  What is the cost of the marginal bad debts   d  Do you recommend this change in credit terms

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Parker Tool is considering lengthening its credit period from 30 to 60 days. All customers will continue

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Financial Accounting

Parker Tool is considering lengthening its credit period from 30 to 60 days. All customers will continue

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Financial Accounting

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