TASK III

NEW ORDER (12 POINTS)

Egnab Inc. is approached by a new customer for an additional order of $7,500. Considering the following data:

• Variable Cost Ratio = 60% ofSales
• Collection Expense Ratio = 5% ofSales
• Annual Interest Rate = 8% (360 days) andthe
• Standard Credit Terms are 30days,

INSTRUCTION:(SHOW YOUR CALCULATIONS AND ROUND TO 2 DECIMAL PLACES)

ShouldEgnab Inc. accept the order?

Give your answer in complete sentences and defend it!