ABC Itd provides 45 days credit to its customers. Present level of sales is Rs. 1.50...
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ABC Itd provides 45 days credit to its customers. Present level of sales is Rs. 1.50 crores. Cost of capital = 15%. Variable cost to sales = 0.80. Company is considering extending its credit period to 60 days. Such an extension would increase the sales by 15 lacs. The bad debts proportional to sales would be 5%. Calculate the increase in gross profit after the change. ABC Itd provides 45 days credit to its customers. Present level of sales is Rs. 1.50 crores. Cost of capital = 15%. Variable cost to sales = 0.80. Company is considering extending its credit period to 60 days. Such an extension would increase the sales by 15 lacs. The bad debts proportional to sales would be 5%. Calculate the increase in gross profit after the change.
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Gross Profit before change 150 crores x 1 080 Rs 030 crores Incre... View the full answer
Related Book For
Financial Accounting Tools for Business Decision Making
ISBN: 978-1118644942
6th Canadian edition
Authors: Paul D. Kimmel, Jerry J. Weygandt, Donald E. Kieso, Barbara Trenholm, Wayne Irvine
Posted Date:
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