Reference no: EM131610392
Fast Turnstiles Co. is evaluating the extension of credit to a new group of customers. Although these customers will provide $288,000 in additional credit sales, 10 percent are likely to be uncollectible. The company will also incur $16,800 in additional collection expense. Production and marketing costs represent 70 percent of sales. The firm is in a 25 percent tax bracket and has a receivables turnover of two times. No other asset buildup will be required to service the new customers. The firm has a 10 percent desired return.
a-1. Calculate the incremental income after taxes.
a-2. Calculate the return on incremental investment. (Input your answer as a percent rounded to 2 decimal places.)
a-3. Should Fast Turnstiles Co. extend credit to these customers? Yes No
b-1. Calculate the incremental income after taxes if 13 percent of the new sales prove to be uncollectible.
b-2. Calculate the return on incremental investment if 13 percent of the new sales prove to be uncollectible. (Input your answer as a percent rounded to 2 decimal places.)
b-3. Should credit be extended if 13 percent of the new sales prove uncollectible? Yes No
c-1. Calculate the return on incremental investment if the receivables turnover drops to 1.6, and 10 percent of the accounts are uncollectible. (Input your answer as a percent rounded to 2 decimal places.)
c-2. Should credit be extended if the receivables turnover drops to 1.6, and 10 percent of the accounts are uncollectible? No Yes
Calculate operating cash flows
: Assume that new project will annually generate revenues of $ 2400000. let's assume that firm's marginal tax rate is 33 percent. Calculate operating cash flows.
|
Coordinated sharing of remote files seems
: Between NIS, NFS, and DFS, the need for coordinated sharing of remote files seems to be well established. However, the principles and mechanisms.
|
What would happen in the given market
: What would happen in this market? Explain your answer and reconstruct the graph developed in question one to show this change.
|
Determine the security and compliance
: Security and compliance are interconnected in important ways. What happens if you have a policy, but you cannot assure compliance?
|
Calculate the incremental income after taxes
: Fast Turnstiles Co. is evaluating the extension of credit to a new group of customers. Calculate the incremental income after taxes.
|
Available in security management
: Many security standards, best practices, and frameworks are available in security management, control objectives, process management, and enterprise development
|
Improve the appearance of a document
: Discuss the different types of graphing and formatting tools that can be added to microsoft word document.
|
Analyze the meaning or implications of the articles content
: Analyze the meaning or implications of the article's contents, as well as any flaws you find in the article. What could have made the article better?
|
Should there be one uniform jurisdiction designated
: What advantages and disadvantages are there with federal, state, tribal, and local trial courts all having jurisdiction over categories of offenses.
|