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What is the net benefit for hope corporation

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Reference no: EM132490420

Hope Corporation has the following data:

Selling price P70

Variable cost per unit 45

Annual credit sales in units 50,400

Collection period 30 days

Rate of return 20%

Point 1: Hope Corporation is considering easing its credit standa4rd. If it does, sales will increase by 25%; collection period will increase to 45 days; bad debts are anticipated to be 4% of the incremental sales; and collection costs will increase by P31,645.

Question 1: If the proposed relaxation in credit standards is implemented, what is the net benefit (loss) for Hope Corporation? Use 360 days

a. P215,000

b. P 315,000

C. (P33,075)

d. (P100,000)

Reference no: EM132490420

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