Enticement CO currently expect sales of 50,000 a month. Variable cost of sales is $40,000 a month
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Enticement CO currently expect sales of 50,000 a month. Variable cost of sales is $40,000 a month (all payable in the month of sale). It is estimated that if the credit period allowed to account receivable were to be increased from 30 days to 60 days, sales volume would increase by 20%. All customers would expect to take advantage of the extended credit. If the cost of capital is 12.5% a year, is the extension of the credit period justiciable in financial terms?
Related Book For
Horngrens Financial And Managerial Accounting The Financial Chapters
ISBN: 9780134486840
6th Edition
Authors: Tracie L. Miller Nobles, Brenda L. Mattison, Ella Mae Matsumura
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