Should comiskey fence co extend credit to these customers

Assignment Help Business Management

Reference no: EM13110900

Q. Comiskey Fence Co. is evaluating the extension of credit to a new group of customers. Although these customers will provide $180,000 in additional credit sales, 12 percent are likely to be uncollectible. The industry will also incur $15,700 in additional collection expense. Production and marketing costs represent 70 percent of sales. The organization is in a 34 percent tax bracket and has a receivables turnover of 5 times. No other asset build-up will be required to service the new customers. The organization has a 10 percent desired return.

a. Should Comiskey Fence Co. extend credit to these customers?

b. Should credit be extended if 15 percent of the new sales prove uncollectible?

c. Should credit be extended if the receivables turnover drops to 1.5 and 12 percent of the accounts are uncollectible (as in part a)?

Reference no: EM13110900

Questions Cloud

Determine how many grams of potassium sulfate can be formed : Determine how many grams of Potassium Sulfate can be formed from 150.0 grams of potassium hydroxide with sufficient sulphuric acid H2SO4?

Discuss options under the contact considering the potential : Using the six essential elements of an enforceable contract and text section on breach, provide a basic analysis, discuss options under the contact considering the potential

Which is an example of a medically important biofilm : Which of the following is an example of a medically important biofilm?

Determine the equilibrium concentrations of gas : Celsius the initial concentration of the three gases are.3M H 2 S,.3H 2 and .150 S 2 you just need to determine the equilibrium concentrations of all these given 3 gases?

Should comiskey fence co extend credit to these customers : The organization is in a 34 percent tax bracket and has a receivables turnover of 5 times. No other asset build-up will be required to service the new customers. The organization has a 10 percent desired return. Should Comiskey Fence Co. extend cr..

Determine the reorder point and the inventory position : The information technology department of State University buys paper for its copier machine frequently. The office manager would like to determine the best quantity to order each time an order is placed.

Compute the final temperature of the mixture : Compute the final temperature of the mixture (assuming no heat loss to the surroundings.)

Illustrate what approach recognizes business decision : Illustrate what approach recognizes that "business decisions consist of continuous, interrelated economic and moral components"

Find difference between sub therapeutic and antibiotics : What is the difference between sub therapeutic and therapeutic antibiotics?

User Account

All Pages