The following companies are trying to decide whether to change their accounts receivables collection policy. Required: Compute
Question:
Required:
Compute the cost of the current receivables policy for each company.
Transcribed Image Text:
Three Rivers Industries Twin Peaks Ltd. Single Signals Inc. Current receivables policy Unit sale price Contribution margin per unit Units sold per year on credit Average collection period in days Bad debts per year Interest rate on line of credit $125 $ 50 120,000 72 $175,000 11% $250 $ 62 75,000 60 $149,000 7% $550 $140 25,000 100 $160,000 9% Proposed new receivables policy Revised average collection period in days Cost % reduction in unit sales 50 $89,000 10% 30 $45,000 7% 70 $60,000 4%
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Answer rating: 75% (8 reviews)
Three Rivers Industries Twin Peaks Ltd Single Signals Inc Cur...View the full answer
Answered By
Bhartendu Goyal
Professional, Experienced, and Expert tutor who will provide speedy and to-the-point solutions. I have been teaching students for 5 years now in different subjects and it's truly been one of the most rewarding experiences of my life. I have also done one-to-one tutoring with 100+ students and help them achieve great subject knowledge. I have expertise in computer subjects like C++, C, Java, and Python programming and other computer Science related fields. Many of my student's parents message me that your lessons improved their children's grades and this is the best only thing you want as a tea...
3.00+
2+ Reviews
10+ Question Solved
Related Book For
Financial Management for Decision Makers
ISBN: 978-0138011604
2nd Canadian edition
Authors: Peter Atrill, Paul Hurley
Question Posted:
Students also viewed these Finance questions
-
You are trying to decide whether to buy stock in Company X or Company Y. Both companies need $1000 capital investment and will earn $200 in good years (with probability 0.5) and $60 in bad years. The...
-
Imagine that you are trying to decide whether to cross a street without using the designated crosswalk at the traffic signal. What are the expected marginal benefits of crossing? The expected...
-
Ellie and Vince are trying to decide whether to purchase a new home. The house they want is priced at $200,000. Annual expenses such as maintenance, taxes, and insurance equal 4 percent of the home's...
-
A mixture containing KClO3, K2CO3, KHCO3, and KCl was heated, producing CO2, O2, and H2O gases according to the following equations: The KCl does not react under the conditions of the reaction. If...
-
Jones Products manufactures and sells to wholesalers approximately 400,000 packages per year of under-water markers at $ 6 per package. Annual costs for the production and sale of this quantity are...
-
A gear reduction unit uses the countershaft shown in the figure. Gear A receives power from another gear with the transmitted force FA applied at the 20_ pressure angle as shown. The power is...
-
Analyze the wine quality of young red wines data in Table B. 19 for multicollinearity. y X2 X3 X4 x6 X7 Xg Xg x10 19.2 0 3.85 66 9.35 5.65 2.40 3.25 0.33 19 0.065 18.3 0 3.73 79 11.15 6.95 3.15 3.80...
-
In his book Capitalism and Freedom, economist Milton Friedman wrote on page 133: There is one and only one social responsibility of businessto use its resources and engage in activities designed to...
-
Zero Corp's total common equity at the end of last year was $350,000 and its net income was $70,000. What was its ROE?
-
Mattel, Inc., and Hasbro are two of the largest and most successful toymakers in the world, in terms of the products they sell and their receivables management practices. To evaluate their ability to...
-
The three companies shown below have gathered data to determine whether they should factor their accounts receivable. Required: Prepare calculations to determine whether any of these companies would...
-
Use the data in Problem and Case 8.7 to compute the cost of switching to a new accounts receivables policy for each company. In problem Three Rivers Industries Twin Peaks Ltd. Single Signals Inc....
-
The town of Millbridge has to make a decision on replacing its garbage truck. It has narrowed the choice down to two different models. Model A will initially cost $ 80,000 and then will cost $ 4,100...
-
True Or False The last-clear-chance doctrine has been retained in most states that have adopted comparative negligence.
-
Discuss the method of nomenclature of grinding wheel.
-
True Or False An insurer cannot terminate a contract on the basis of the insured being convicted of driving while intoxicated.
-
Identify the differences between an annulment and a divorce.
-
Sammy plc reported net sales of 300,000, 330,000, and 360,000 in the years, 2023, 2024, and 2025, respectively. If 2023 is the base year, what is the trend percentage for 2025? a. 77%. b. 108%. c....
-
Calculate C F(r) dr for the given data. If F is a force, this gives the work done by the force in the displacement along C. Show the details. F = [x + y, y + z, z + x], C: r = [2t, 5t, t] t = 0 to...
-
You've been asked to take over leadership of a group of paralegals that once had a reputation for being a tight-knit, supportive team, but you quickly figure out that this team is in danger of...
-
The chief executive officer of Sparkrite Ltd, a trading business, has just received summary sets of financial statements for last year and this year: Required: (a) Show, by using the data given, how...
-
Robinson plc is an international construction business that is based in the UK. The business expects to receive 10 million in six months time as the final payment for a bridge that the business...
-
Mistor S.A. is a large, event-management business based in Spain that has recently agreed to organise a large trade fair in the US. On 1 August Year 7, the business expects to receive \($10\) million...
-
Use factoring by grouping to solve the following equation. 3-522-16r+80=0 Enter the solutions, separated by commas if necessary. Do not use a plus-minus () sign when entering separate answers....
-
What are some intervention policies that make provisions for destitute college or university students in Ethiopia? Please provide Examples
-
Develop a simple application of two- variable linear programming problem to find an optimal product mix in a 'realistic' context. Specify the resources to be considered requirements, and the market...
Study smarter with the SolutionInn App