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 has an existing sales of Rs.50 lakhs and permits a credit period of 30 days to its customers. The firm cost of capital is 10% and the ratio of variable cost to sales is 85. The firm is contemplating on rising the credit period to 60 days that would result in raised sales of Rs.5 lakhs. The bad debts on raised sales are expected to be 8%. The tax rate for M/s ABC is 40 percent. Must the firm extend the credit period?
Solution
? I = (ACPn - ACP0) [S0/360] + V(ACPn)( ?S/360)
? I = (60 - 30) [50/360] + 8.5 × 60 × 5/360
? I = (30) × 50/360 + .708333
?I = 4.8749997 × 1, 00,000
= 4, 87,500
= 4, 874,99.9
?NP = [ ?S (1 - V ) - ? Sbn ] (1 - t ) - k?I
= [5 (015 ) - 5 × .08 ] (1 - 04 ) - .10 × 4,87 ,500
= [.75 - .4] (.6) - 4.875000
= (.35 ) (-6) - .48750
= (.21 - .48750 ) × 1,00 ,000
= - 27 ,750
The raise in credit period results in a negative net profit thus the credit period must not be extended.
Susan works in a real estate office that is equipped with up-to-date copiers, scanners, and printers. She is frequently the only employee working in the office in the evenings and
Explain Indirect expanses: These are expanses which can't be directly conveniently and wholly allocated to a specific cost centres or cost units examples of such expanses are h
Explain about Programmed budget It having expects revenues and cost of various products or projects that are termed as the main programmers of the firm. Such a budget can be pr
Difference between managerial accounting and financial accounting are mentioned below Audience – Internal Vs External Format of Reporting – Free format Vs prescribed
Advantages of standard costing 1) Measuring efficiency: standard costing is a yardstick for measuring efficiency. The comparison of actual costs with standard costs enables t
Proprietary ratio/ equity ratio Meaning: the ratio measures a relationship among proprietor's funds and the total assets. Objective: the objective of computing this ra
Question 1: (a) Discuss the main features and problems which Mauritius has to face as a small island developing country. (b) What are the factors which have led to the f
Give the following cost data Costs /per unit labor … $ 4 Materials …5 Fixed cost … $ 12000 Determine the break even point in units if the selling price is $ 19.00 Determine th
what is the role of accounting standard board?
How marginal costing would improve the problems faced in absorption costing on manipulation of profits.
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: +91-977-207-8620
Phone: +91-977-207-8620
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd