Already have an account? Get multiple benefits of using own account!
Login in your account..!
Remember me
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
M/s ABC is seeing relaxing its collection efforts. At current its sales are as Rs.40 lakhs, the ACP is here 20 days and variable cost to sales ratio is .8 and bad debts are as .05 percent. Relaxation in collection attempt is exacted to push sales up through Rs. 5 lakhs, raise ACP to 40 days and bad debt ratio to 0.06. ABC tax rate is 40%. Compute the effect of relaxing credit effort on net profit.
Solution:
? BD = bn (S0+ ? S) -b0 S0
= .06 (40+5) - .05 × 40
= 2.7 - 2
=.7 lakhs
? I = ? I = (ACPn - ACP0) [S0/360] + V(ACPn)( ?S/360)
= 40/360 (40 - 20) + 5/360 × 40 × .8
= 20/9 + 4/9
?I = 2.6666667
?NP = [ ?S (1 - V ) - ?BD] (1 - t ) - k?I
= [5 (.2) - .7] (.6) - .12 (2.666667)
= .18 - .32
= -.14 lakhs
As the effect on net profit is negative hence the credit efforts must not be relaxed.
Determine the Internal factors of pricing decision 1) Organization factor: pricing decision occur on two level in the organization. Overall price strategy is dealt with by to
When to order-Material control If deliveries from suppliers normally take two weeks to arrive, then replenishment orders should be placed with them when the level of stocks rep
It is a spontaneous source of finance that is commonly extended to business organization depending on the custom of the competition and trade prevailing within the organization and
Product life cycle costing It is an approach used to give a long term picture of product line profitability feedback on the effectiveness of life cycle planning and cost data t
The requirement for working capital fluctuates according the level of inventory, production, debtors and creditors etc. The working capital needs are not uniform during the year be
Loan Syndication : There are two ways of syndication as: direct lending and through participation. - Direct Lending: regarding "direct lending" all the lenders sign the loa
Planning, Directing, and Controlling A clever sign hanging on the wall of a business establishment: "The Managers are paid to manage the work-- If There Were No Problems we wou
Question 1: a. Distinguish between Advertising and Public Relation? b. Discuss the methods adopted by a Public Relation company in promoting the image of a destination in th
Significance points of Variance The following significant points must be kept in mind: Controllability: Controllability should also influence the decision whether t
define budget control system
Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!
whatsapp: +91-977-207-8620
Phone: +91-977-207-8620
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd