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!
The current sales of M/s ABC are Rs.100 lakhs. Through relaxing the credit standards the firm can produce additional sales of Rs.15 lakhs on that bad debt losses would be 10 percent. The variable cost for the firm is, 80 percent average collection period ACP is 40 days and post tax cost of funds is 10 % and the tax rate applicable to the firm is 40%. Determine whether the firm must relax credit standards or not?
Solution:
? NP = [ ? S (1-V) - ? S bn] (1-t) - k ? I
? NP = [15 (1-.80) - 15 × .1] (1-.4) -.10 × (15/360) × 40 ×.80
= [3 -1.5] (.6) -.1333
=.9 -.1333
=.7667 × 1,00,000
=76,667
As the impact of change in credit standards outcomes in a positive change in total profits thus the proposed change must be accepted.
Limitation of break even charts Despite many advantages a break even chart suffers from the following limitations: 1) A break even chart is based upon a number of assumption
It is a commitment by a bank to lend a specific amount of funds on demand identifies the maximum amount of unsecured credit the bank will allow the customer to borrow at any time.
1 Describe the impact of different types of standards on motivations, and specifically, the likely effect on motivation of adopting the labor standard recommended for Geeta & Compa
Imposed Budgets In this approach to budgeting, top management prepares a budget with little or no help from operating personnel, which is then obligatory upon the employees who
Definition of Activities based costing Activity based costing is a system that focuses on activities as the fundamental cost objects and uses the costs of these activities as b
According to the Philadelphia Inquirer, in 2004 the city of Philadelphia planned to spend $14 million to convert the Convention Center into an appropriate venue for the Republican
Discuss arguably how management accountants should decide when are faced with the extra shift decision
h. Production orders that had cost 450,000 to complete according to their job cost sheets were shipped to customers during the month. These goods were sold on account at 50% above
MAKE OR BUY DECISIONS UNDER LIMITING FACTORS One reason for buying products/services from another organisation is the scarcity of resources, so that the company may be unable t
advantages of vertical balance sheet \
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