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Question Help Accounts receivable changes without bad debts Tara's Textiles currently has credit sales of $363 million per year and an average collection period of
Question Help Accounts receivable changes without bad debts Tara's Textiles currently has credit sales of $363 million per year and an average collection period of 59 days Assume that the price of Tara's products is 560 per unit and that the variable costs are $55 per unit. The firm is considering an accounts receivable change that will result in a 20.3% increase in sales and a 19 2% increase in the average collection period No change in bad debts is expected the firm's equal risk opportunity cost on its investment in accounts receivables 142 (Note Use a 365 day year) a. Calculate the additional profit contribution from new sales that the firm will realize it makes the proposed change b. What marginal investment in accounts receivable will result? c. Calculate the cost of the marginal investment in accounts receivable d. Should the firm implement the proposed change? What other information would be helpful in your analysis? a. The additional profit contribution from the increase in sale units is (Round to the nearest dollar) Incorrect 1
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