Question 26 1 pts A corporation which currently generates Php30 million in credit sales gives credit terms of \"net 30 days\". To stimulate demand, the firm is considering to change its credit terms to \"net 45 days\". This is expected to increase sales by 10% and increase average collection period from 30 days to 45 days. The corporation's contribution margin is 10% and its required return on receivables is at 20%. Should the company implement the credit policy? Yes, because the policy results to a net benefit of Php130,000 Indifferent, because the policy results to a net benefit of Php0 No, because the policy results to a net cost of Php17,500 0 Yes, because the policy results to a net benefit of Php150,000 Question 27 1 pts A company with Php24 million in annual revenues recognizes bad debt losses equivalent to 2% of sales. To reduce its losses, the company is considering to ramp up its collection efforts. Based on estimates, the company must spend an additional Php37,500 monthly to be able to reduce its bad debts losses by 90%. What is the annual net benefit or cost to the company of implementing the policy? Php126,000 net benefit Php432,000 net benefit Php48,000 net COSt Php18,000 net cost Question 28 1 pts A company with Php36 million in sales provides a 2/10, net 45 discount period to its customers. To reduce its days receivables from 36 days to 20 days, the company plans to change its credit terms to 5/10, net 30. The change in credit terms will increase the percentage of customers availing the discount from 20% to 25%. If the company's contribution margin is 25% and its required return on receivables is 20%, what is the company's net benefit or cost as a result of changing the discount terms? Assume a 360-day year. Php104,000 net benefit Php14,000 net benefit Php66,000 net cost Php24,000 net benefit Question 29 1 pts Which of the following is not a requirement in making a just-in-time system work? Strong management commitment All of the above are necessary conditions Small lot sizes Geographic concentration Question 30 1 pts Which of the following is true regarding a just-in- time inventory system? (1) The just-in-time system can be described as \"pushing\" inventories as produced instead of the traditional \"pulling\" of inventories as needed. (11) For a just-in-time system to work, a company should have a very extensive supplier network to reduce dependence on any one supplier. Neither | norll lonly Both l and II || only Question 31 1 pts Which of the following is incorrect with regard to safety stock? All of the above are correct. Safety stock is held in reserve as a cushion against uncertain demand and replenishment lead time. A company will be better off by implementing a level of safety stock that keeps stock-out costs at a minimum. The more accurate a company is able to forecast demand and the more effort a company puts to reduce supplier delays, the less safety stock is needed. Question 32 1 pts Which of the following variables are directly proportional to the economic order quantity? (1) Ordering costs (11) Carrying costs (111) Total inventory usage for the period land ll only land lll only II and Ill only I, II, and III Question 33 1 pts Which of the following is incorrect with regard to the order point? Because of the precautionary nature of safety stock, a company that provides for safety stock can have a lower order point compared to one with no provision. The order point takes into account average lead time and average daily usage of inventory. The order point is the quantity to which inventory must fall in order to signal that an order must be placed to replenish an item. All of the above are correct. Question 34 1 pts A company that incurs Php6,400 per order and Php90 annual storage cost per unit has determined its economic order quantity to be at 32,000 units. What is the company's total inventory requirement for the year? 7,200,000 units 10,368,000 units 14,400,000 units 3,600,000 units