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.
distinguish between cost unit and cost centre
Echeverria SA is an Argentinian manufacturing company whose total factory overhead costs fluctuate somewhat from year to year according to the number of machine-hours worked in its
11.1 Process Solutions provides a computer-based document processing service. The accountant has produced the following analysis. Standard Modified Advanced Sales quantity 1,000
Private sector companies have multiple stakeholders who are likely to have divergent interests.( five stakeholder groups and discuss their financial and other objectives).
Use of Budgetary controls Budgetary controls are used for the following reasons: 1) To state the objectives of the organization as a whole. 2) To reveal the extent by whi
A purchased product, sold in a retail store, has a normally distributed daily demand, with a mean of 8 units/day and a variance of 4 (units) 2 . Its supply lead time is 6 days and
what are the factors should be considered before terminated the operation of a losing firm??
Management Accounting 1) Which is concerned with provision of information to people within the organization to help them make better decisions? Management accounting is concer
The Rohr Company’s old equipment for making subassemblies is worn out. The company is considering two courses of action: (a) Completely replacing the old equipment with new equipme
Absolute liquid ratio - Liquidity ratios Although receivables debtors and bills receivable are usually more liquid than inventories yet there may be doubts regarding their rea
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