Pincer plc is hoping to increase sales by granting its customers longer payment periods. Its annual...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Pincer plc is hoping to increase sales by granting its customers longer payment periods. Its annual sales currently stand at €1m and it gives its customers an average of 30 days to pay. (a) The company made the following assumptions when defining its customer credit policy. Extension of payment period (days) 15 30 45 Extension of payment period (days) 15 30 Increase in sales (€) 60 750,000 The sales price of a manufactured unit is € 4 and the cost price is € 3.2, including €1 in fixed costs. What policy should the company introduce if it requires a 20% return (before tax) on its capital invested (its inventories are financed through supplier credit)? (b) Pincer has also made 45 400,000 600,000 700,000 following forecasts for bad debts: Bad debts (sales, %) 2 4-5 7 60 Bad debts currently only account for 1.2% of debts. Which policy should the company introduce? Pincer plc is hoping to increase sales by granting its customers longer payment periods. Its annual sales currently stand at €1m and it gives its customers an average of 30 days to pay. (a) The company made the following assumptions when defining its customer credit policy. Extension of payment period (days) 15 30 45 Extension of payment period (days) 15 30 Increase in sales (€) 60 750,000 The sales price of a manufactured unit is € 4 and the cost price is € 3.2, including €1 in fixed costs. What policy should the company introduce if it requires a 20% return (before tax) on its capital invested (its inventories are financed through supplier credit)? (b) Pincer has also made 45 400,000 600,000 700,000 following forecasts for bad debts: Bad debts (sales, %) 2 4-5 7 60 Bad debts currently only account for 1.2% of debts. Which policy should the company introduce?
Expert Answer:
Answer rating: 100% (QA)
Pincer plc is hoping to increase sales by granting its customers longer payment p... View the full answer
Related Book For
Essentials of Business Statistics
ISBN: 978-0078020537
5th edition
Authors: Bruce Bowerman, Richard Connell, Emily Murphree, Burdeane Or
Posted Date:
Students also viewed these finance questions
-
When is it appropriate to use stratified random sampling? What are strata, and how should strata be selected?
-
When is it appropriate to use acquisition/consolidation, equity, or fair value methods for an investment in another corporation?
-
When is it appropriate to use stratified random sampling? What are strata, and how should strata be selected?
-
Uniform rod AB of length l and mass m lies in a vertical plane and is acted upon by a couple M. The ends of the rod are connected to small rollers which rest against frictionless surfaces. (a)...
-
a. Calculate the average daily change in the Index, shown to 6 decimal places. b. State the average daily change in the S&P 500 Index for the month of November 2012 as a percentage. c. State the...
-
For each of the following problems, set up an equation and solve. (a) A company laid off one-sixth of its workforce because of falling sales. If the number of employees after the layoff is 690, how...
-
A compilation of financial statements involves presenting management's assertions in the form of financial statements without expressing any degree of assurance. Nevertheless, even though no...
-
Protein Blenders, Inc., made a contract with Gingerich to buy from him the shares of stock of a small corporation. When the buyer refused to take and pay for the stock, Gingerich sued for specific...
-
1. What is the issue discussed? Why you think it is interesting to discuss? 2. Who or what parties are involved? 3. How the issue will relate to the firms or (international) community or (global)...
-
The COVID-19 pandemic affected companies in the food industry in unique ways, particularly during 2020. Ruth's Hospitality Group (Ticker: RUTH) develops and operates fine dining restaurants under the...
-
Find the domain of the variable in the equation. Write the answer in interval notation. 3x =7x+4 (x-3)(x-5)
-
What are the purposes of persuasive messages?
-
How should you organize a letter of recommendation?
-
What kind of logical proof is used in fund-raising messages?
-
What are some purposes for informative and positive messages?
-
How should you prepare for a performance review?
-
1, How should the board of directors react if their firm grows its M-score? 2. As the economic environment grows more difficult and firms become more tempted to cheat, what can corporate governance...
-
When you weigh yourself on good old terra firma (solid ground), your weight is 142 lb. In an elevator your apparent weight is 121 lb. What are the direction and magnitude of the elevator's...
-
The following data consist of the revenue growth rates ( in percent) for a group of 20 firms. Construct a stem- and- leaf display for these data. 36 59 42 65 91 32 56 284951 30 55 33 63 70 44 42 83...
-
In an article in the Journal of Advertising, Weinberger and Spotts compare the use of humor in television ads in the United States and the United Kingdom. They found that a substantially greater...
-
In the book Essentials of Marketing Research, William R. Dillon, Thomas J. Madden, and Neil H. Firtle discuss a marketing research proposal to study day- after recall for a brand of mouthwash. To...
-
True or False. The element stiffness matrices are always singular.
-
Derive the stiffness matrix of the bar element in longitudinal vibration whose cross-sectional area varies as \(A(x)=A_{0} e^{-(x / l)}\), where \(A_{0}\) is the area at the root (see Fig. 12.14)....
-
Fill in the Blank. In the finite element method, the elements are assumed to be interconnected at certain points known as ____________ .
Study smarter with the SolutionInn App