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's present credit terms are 1/10 net 30 that they are planning to change to 2/10 net 30. The current average collection period is 20 days and the variable cost to sales ratio is 85 and the cost of capital is 10%. The proportion of sales on that customers now take discount is .5. After relaxation of discount terms this is assumed that the ACP will decrease to 14 days, sales will rise from Rs.80 lakhs to Rs 85 lakhs and the proportion of discount sales will rise to .8. Tax rate for the firm is 40% compute the effect of above modifications on net profit.
Solution:
? I = (ACPn - ACP0) [S0/360] + V(ACPn)( ?S/360)
? I = 80/360 (20 - 14) - .85 × 5/360 × 14
= 1.1680555 lakhs
? DIS = Pn (S0+ ? S) dn - P0S0d0
= .96 lakhs
? NP = ? S (1 - v) - ? DIS] (1 - t) + k ?I
= [5 (1 - .85) - .96] (1 - .4) + .1 ×1.1680555
= (.75 - .96) (.6) + .116805555
= - .126 + .11680555
= - .009194 lakhs
As the increase in net profit is negative the cash discount policy must not be liberalized.
Creditors turnover ratio ( or payables turnover ratio) Meaning: this ratio establishes a relation ship between net credit purchases and average trade creditors. Objective
Capital Project comparing hybrid vs non-hybrid cars.
Steps of choosing an accounting based performance measure Consider the overall goal of the organization as a whole. It is important to choose a measure of accomplishment that r
State overhead expenses It is to be noted that the term overheard has a wider meaning than the term indirect expanses. Overheads include the cost of the indirect material and
Explain the tools of management accounting
THE GAMES ECONOMISTS PLAY It sounds like a sports fan's dream. In Stockholm on October 11th, three men share a $1m prize for their skill at analyzing games. They are not telev
Stine Company uses a job order cost system. On May 1, the company has a balance in Work in Process Inventory of $3,730 and two jobs in process: Job No. 429 $2,150, and Job No. 430
Explain Indirect expanses: These are expanses which can't be directly conveniently and wholly allocated to a specific cost centres or cost units examples of such expanses are h
Explain the cost According to controllability: Controllable cost: this is a cost which can be inclined by the action of a specified member of an undertaking. The organization
International Transfer pricing International transfer pricing refers to the determination of prices to be charged between related persons and in particular within a multination
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