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.
THE BREAK EVEN POINT
what is the topic about? what are the practical implications? what are the practical criticisms?
Cost concept . techniques of costing . absorption costing
Std error of the slope (Sb) Correlation coefficient measures the degree of association between two variables such as the cost and the activity level. The standard error of ‘
implications of applying accounting concepts wrongly
Security Analysis and Portfolio Management Define Capital Market Line and how is it dissimilar from Security Market Line. Describe with illustrations?
Master budgeting Jaya Sdn. Bhd. is a wholesaler. The management of Jaya Sdn. Bhd. has been extremely worried about the company''s cash position over the last few years. In July 201
How to write introduction on strategy plan
the brown boot company was formed
The production department has been investigating possible ways to trim total production costs. One possibility currently being examined is to make the paint cans instead of purchas
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