User Account

All Pages

How much bad-debt losses will be reduced

Assignment Help Accounting Basics
Reference no: EM133148839

Question - XYZ, Inc., spends $300,000 per annum on its collection department. The company has $50 million in credit sales, its average collection period is 1.5 months, and the percentage of bad-debt losses is 3.0%. The company believes that, if it were to double its collection personnel, it could bring down the average collection period to 1 months and bad-debt losses to 2.5%. The added cost is $300,000, bringing total collection expenditures to $600,000 annually.

Required -

1- At MARR of 10%, what would be your recommendation?

2- How much bad-debt losses will be reduced if the expansion is adopted?

3- How much account receivable will be decreased if the expansion is adopted?

Reference no: EM133148839

Questions Cloud

What amount will be reported as a deferred tax asset : What amount will be reported as a deferred tax asset on Rachel's consolidated SFP as at each of December 31, 2011, 2012, 2013 and 2014
Evaluate and apply how airlines can maximise their profits : Evaluate and apply how airlines can maximise their profits and minimise their risks via revenue management strategies
Discuss the difference between Consolidated Group and MEC : What types of expenditure are expressly excluded from the operation of the provision? Discuss the difference between Consolidated Group and MEC
Determine the value of ending inventory using LIFO : The firm uses the periodic inventory system. During the year, 60 units of the item were sold. Determine the value of ending inventory using LIFO
How much bad-debt losses will be reduced : The company has $50 million in credit sales, its average collection period is 1.5 months, How much bad-debt losses will be reduced
Compute Roma first-year net income : Prepaid $9,250 cash for costs that will not be expensed until next year. Compute Roma's first-year net income under the cash basis
Making decisions to real world business problems : Comment on what you learned from the individual assignment. What was interesting, what was challenging and what did you learn from it
Compute the new equipment net present value : Compute the new equipment's net present value. Use the incremental cost approach, and round all dollar amounts to the nearest whole dollar
How many impressions per month will ColorGrafix have to sell : If ColorGrafix leases the iGen3 and chooses Option B, how many impressions per month will ColorGrafix have to sell and produce to break even

Reviews

Write a Review

Accounting Basics Questions & Answers

  How much control does fed have over this longer real rate

Hubbard argues that the Fed can control the Fed funds rate, but the interest rate that is important for the economy is a longer-term real rate of interest.   How much control does the Fed have over this longer real rate?

  Coures:- fundamental accounting principles

Coures:- Fundamental Accounting Principles: - Explain the goals and uses of special journals.

  Accounting problems

Accounting problems,  Draw a detailed timeline incorporating the dividends, calculate    the exact Payback Period  b)   the discounted Payback Period. the IRR,  the NPV, the Profitability Index.

  Theory of interest - term structure of interest rates

Term Structure of Interest Rates

  Write a report on internal controls

Write a report on Internal Controls

  Prepare the bank reconciliation for company

Prepare the bank reconciliation for company.

  Cost-benefit analysis

Create a cost-benefit analysis to evaluate the project

  Theory of interest

Theory of Interest: NPV, IRR, Nominal and Real, Amortization, Sinking Fund, TWRR, DWRR

  Liquidity and profitability

Distinguish between liquidity and profitability.

  What is the expected risk premium on the portfolio

Your Corp, Inc. has a corporate tax rate of 35%. Please calculate their after tax cost of debt expressed as a percentage. Your Corp, Inc. has several outstanding bond issues all of which require semiannual interest payments.

  Simple interest and compound interest

Simple Interest, Compound interest, discount rate, force of interest, AV, PV

  Capm and venture capital

CAPM and Venture Capital

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