Already have an account? Get multiple benefits of using own account!
Login in your account..!
Remember me
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
M/s ABC is seeing relaxing its collection efforts. At current its sales are as Rs.40 lakhs, the ACP is here 20 days and variable cost to sales ratio is .8 and bad debts are as .05 percent. Relaxation in collection attempt is exacted to push sales up through Rs. 5 lakhs, raise ACP to 40 days and bad debt ratio to 0.06. ABC tax rate is 40%. Compute the effect of relaxing credit effort on net profit.
Solution:
? BD = bn (S0+ ? S) -b0 S0
= .06 (40+5) - .05 × 40
= 2.7 - 2
=.7 lakhs
? I = ? I = (ACPn - ACP0) [S0/360] + V(ACPn)( ?S/360)
= 40/360 (40 - 20) + 5/360 × 40 × .8
= 20/9 + 4/9
?I = 2.6666667
?NP = [ ?S (1 - V ) - ?BD] (1 - t ) - k?I
= [5 (.2) - .7] (.6) - .12 (2.666667)
= .18 - .32
= -.14 lakhs
As the effect on net profit is negative hence the credit efforts must not be relaxed.
Absorption cost Absorption, or full cost systems, transfer the full cost of the supplying department to the receiving department. Where a profit is to be allowed to the supplyi
1. If the marginal cost of producing a good is increasing as a firm produces more of the good, then which of the following must be true? a. AFC is rising b. AVC i
Decision-making is an integral part of all management functions. It is the process of choosing the among alternative courses of action. Managers have to
Integer Programming It is a technique for solving a linear programming model with an added constraint that the decision variables must only be non-negative integers. In the
Profitability ratios The primary objective of a business under taking is to earn profits. Profit earning is considered necessary for the survival of the business. A business re
Non-zero lead time (determining reorder point) This basic EOQ model assumes that the suppliers lead time is zero (i.e. goods are delivered immediately on the day the order was
what is nile's strategy for success in the marketplace ?
using the operating cycle and any financial management knowledge discuss the applicability of such cycle to poultry business in Uganda (consider broilers)
Non-Zero Sum Games Within very vast situations of possible non-zero games, varying degrees of co-operation exist between the participants. Games theory has been sufficiently de
In this method, approximation of various assets here excluding cash and including liabilities are made getting into consideration the transactions in the ensuring period. Afterward
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!
whatsapp: +1-415-670-9521
Phone: +1-415-670-9521
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd