User Account

All Pages

Average cost per unit at current sales volume

Assignment Help Finance Basics
Reference no: EM133110994

Fred Davis is a finance director of a large industrial products firm that offers a 2% discount for payment within 10 days. The average collection period is 28 days and 30% of his customers take the discount. He contends that the discount should be dropped contending that the average collection would only increase to 30 days saving 3% on all accounts taking the discount. However, the marketing manager estimates that sales would drop from 21,000 to 20,000 units. The firm has a 20% required rate of return and if the selling price is $22 per unit with the average cost per unit at current sales volume and the variable cost is $17 per unit, should the firm discontinue the discount?

Reference no: EM133110994

Questions Cloud

Calculate profit under each of the alternatives : MiniTek could purchase clocks to fill the Kmart order for $12.00 from Trans-Tech Asia, Calculate profit under each of the alternatives
Finance global business expansion : How can businesses use the resources of the Export-Import Bank of the United States to finance global business expansion?
Prepare journal entries for each transaction : Prepare journal entries for each transaction. Nov. 1, 2018 Mercury issued a $20 million 9-month note. Interest was discounted at issuance at a 6% discount rate
Finance global business expansion : How can businesses use the resources of the Export-Import Bank of the United States to finance global business expansion?
Average cost per unit at current sales volume : Fred Davis is a finance director of a large industrial products firm that offers a 2% discount for payment within 10 days. The average collection period is 28 d
Determine the net present value : An investment of $83 generates after-tax cash flows of $44.00 in Year 1, $68.00 in Year 2, and $135.00 in Year 3. Determine the net present value
Prevent managers from wasting money : What might the firm worry about with regards to manager spending? How can the firm use payout policy to prevent managers from wasting money?
What adjustment would mayberry advertising record : Mayberry Advertising had accounts receivable of $20,000. What adjustment would Mayberry Advertising record to establish Allowance for Uncollectible Accounts
What the cost assigned to the units transferred : Materials $1,380,000; Conversion costs $1, 530,000. What the cost assigned to the units transferred to finished goods during April

Reviews

Write a Review

Finance Basics Questions & Answers

  Financial reporting and analysis

Finance is about Gunns Ltd, a company in dealing with forestry products in Australia. The company has also been listed in Australian Stock Exchange. As many companies producing forestry products, even Gunns Ltd is facing various problems. Due to the ..

  A report on financial accounting

This report is specific for a core understanding for Financial Accounting and its relevant factors.

  Describe the types of financial ratios

Describe the types of financial ratios and other financial performance measures that are used during venture's successful life cycle.

  Differences between sole proprietorship and corporation

Briefly describe the major differences between a sole proprietorship and a corporation

  Prepare a cash budget statement

Calculate the expected value of the apartment in 20 years' time. What is the mortgage loan repayment at the beginning of each month

  What are the implied interest rates

What are the implied interest rates in Europe and the U.S.?

  State pricing theory and no-arbitrage pricing theory

State pricing theory and no-arbitrage pricing theory

  Small business administration

Identify the likely stage for each venture and describe the type of financing each venture is likely to be seeking and identify potential sources for that financing.

  Effect of financial leverage

The Effect of Financial Leverage and working capital management

  Evaluate the basis for the payment to the lender

Evaluate the basis for the payment to the lender and basis for the payment to the company-counterparty.

  Importance of opps, ipps, mpfs and dmepos

Research and discuss the differences and importance of : OPPS, IPPS, MPFS and DMEPOS.

  Time value of money

Time Value of Money project

Free Assignment Quote

Assured A++ Grade

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!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd