Question
X Co is thinking about expanding. They have provided the following information: Expect an extra $2.5million in sales 18% of the sales will be uncollectible
X Co is thinking about expanding.
They have provided the following information:
Expect an extra $2.5million in sales
18% of the sales will be uncollectible
Collection Costs are 3% on all new sales
Production Costs 70% of sales
Selling expenses are 11% of sales
Opportunity Cost of 22% (before taxes)
Turn Receivables 4 times per year
Should X Co expand?
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Defensive Estimating Protecting Your Profits
Authors: William Asdal
1st Edition
0867186208, 978-0867186208
