Your first major assignment after your recent promotion at To help in your decision on relaxing credit terms, you haw Ice Nine involves overseeing ihe management of accounts been asked to respond to the following questions: receivable and inventory. The first item you must attend to involves a proposed change in credit policy which would Questions involve relaxing eredit terms from the existing terms of 1/50, net 70 to 2/60, net 90 in the hope of securing new sales. The 1 What determines the size of investment that Ice Nine makes management at Ice Nine does not expect bad debt losses on in accounts receivable? its current customers to change under the new credit policy. 2 If a firm currently buys from Ice Nine on trade credit with The following information should aid you in the analysis of the present terms of 1/50, net 70, and decides to forgo the this problem: trade credit discount and pay on the net day, what is the annualised cost to that firm of forgoing the discount? New les level (all credit) S8000000 3 Ir Ice Nine changes its trade credit terms to 2/60, net 90. what is the annualised cost to a firm that buy credit Orijinal sales level (all credit) 57000000 from Ice Nine and decides to forgo the trade credit discount Contribution margin 254 and pay on the net day? Percentage bad debt losses on new sales 4 What is the estimate change in protis resulting New average collection pened 75 day meres sales low any additional bud debts Original average collection jperiod with the proposal elunge in credit policy Additional investment inventory SSON Estime the cost of actional investment Pret required rate of tot IS ceivable and inventory sociated with the people New percentay cancut 29 in credit policy Peteoro taking the new 50 Estimate the change in the of the shore prochain credite On pecades 7 Cup the it Pin till Your first major assignment after your recent promotion at To help in your decision on relaxing credit terms, you haw Ice Nine involves overseeing ihe management of accounts been asked to respond to the following questions: receivable and inventory. The first item you must attend to involves a proposed change in credit policy which would Questions involve relaxing eredit terms from the existing terms of 1/50, net 70 to 2/60, net 90 in the hope of securing new sales. The 1 What determines the size of investment that Ice Nine makes management at Ice Nine does not expect bad debt losses on in accounts receivable? its current customers to change under the new credit policy. 2 If a firm currently buys from Ice Nine on trade credit with The following information should aid you in the analysis of the present terms of 1/50, net 70, and decides to forgo the this problem: trade credit discount and pay on the net day, what is the annualised cost to that firm of forgoing the discount? New les level (all credit) S8000000 3 Ir Ice Nine changes its trade credit terms to 2/60, net 90. what is the annualised cost to a firm that buy credit Orijinal sales level (all credit) 57000000 from Ice Nine and decides to forgo the trade credit discount Contribution margin 254 and pay on the net day? Percentage bad debt losses on new sales 4 What is the estimate change in protis resulting New average collection pened 75 day meres sales low any additional bud debts Original average collection jperiod with the proposal elunge in credit policy Additional investment inventory SSON Estime the cost of actional investment Pret required rate of tot IS ceivable and inventory sociated with the people New percentay cancut 29 in credit policy Peteoro taking the new 50 Estimate the change in the of the shore prochain credite On pecades 7 Cup the it Pin till
