What is the net result of implementing the proposed plan

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Question - Duhat is considering relaxing its credit standards to encourage more sales. As a result, sales are expected to increase 20 percent from 400 canoes per year. The average collection period is expected to increase to 50 days from 30 days, 360 days in a year, and bad debts are expected to double the current 1 percent level.

Required - The price per canoe is P950, the variable cost per canoe is P600 and the average cost per unit at the 300 unit level is P800. The firm's required return on investment is 15 percent. What is the net result of implementing the proposed plan?

Reference no: EM132746710

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