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The sales Director of Sputnik Co. suggests that certain terms be modified. He estimates the following effects: Sales will increase by at least 20% Accounts
The sales Director of Sputnik Co. suggests that certain terms be modified. He estimates the following effects: Sales will increase by at least 20% Accounts receivable turnover will be reduced to 8 times from the present turnover of 10 times. Bad debts, now at 1 % of sales will increase to 1.5%. sales before the proposed changes is at p900,000 variable cost ratio is 55% and the desired rate of return is 20%. Fixed expenses amount to P150,000. You as the Financial Controller of the company allow the revision of its credit terms because losses will be reduced by
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