ACME Inc sells on terms net of 30 days and is considering changing the terms to...
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ACME Inc sells on terms net of 30 days and is considering changing the terms to net 45 days. The company wants the funds to purchase equipment and does not want to take out a loan. Management hopes that the machinery will generate a return on investment greater than 15%. The expected effect of the change in credit is detailed below. Should the company adopt the change? Why or why not? Show your calculations. in ($000s) Revenue Profit/Net Income for the year Trade Receivables Net 30 Today 195 17 25 Net 45 Proposed 210 24 50 Change 15 7 25 ACME Inc sells on terms net of 30 days and is considering changing the terms to net 45 days. The company wants the funds to purchase equipment and does not want to take out a loan. Management hopes that the machinery will generate a return on investment greater than 15%. The expected effect of the change in credit is detailed below. Should the company adopt the change? Why or why not? Show your calculations. in ($000s) Revenue Profit/Net Income for the year Trade Receivables Net 30 Today 195 17 25 Net 45 Proposed 210 24 50 Change 15 7 25 ACME Inc sells on terms net of 30 days and is considering changing the terms to net 45 days. The company wants the funds to purchase equipment and does not want to take out a loan. Management hopes that the machinery will generate a return on investment greater than 15%. The expected effect of the change in credit is detailed below. Should the company adopt the change? Why or why not? Show your calculations. in ($000s) Revenue Profit/Net Income for the year Trade Receivables Net 30 Today 195 17 25 Net 45 Proposed 210 24 50 Change 15 7 25 ACME Inc sells on terms net of 30 days and is considering changing the terms to net 45 days. The company wants the funds to purchase equipment and does not want to take out a loan. Management hopes that the machinery will generate a return on investment greater than 15%. The expected effect of the change in credit is detailed below. Should the company adopt the change? Why or why not? Show your calculations. in ($000s) Revenue Profit/Net Income for the year Trade Receivables Net 30 Today 195 17 25 Net 45 Proposed 210 24 50 Change 15 7 25 ACME Inc sells on terms net of 30 days and is considering changing the terms to net 45 days. The company wants the funds to purchase equipment and does not want to take out a loan. Management hopes that the machinery will generate a return on investment greater than 15%. The expected effect of the change in credit is detailed below. Should the company adopt the change? Why or why not? Show your calculations. in ($000s) Revenue Profit/Net Income for the year Trade Receivables Net 30 Today 195 17 25 Net 45 Proposed 210 24 50 Change 15 7 25 ACME Inc sells on terms net of 30 days and is considering changing the terms to net 45 days. The company wants the funds to purchase equipment and does not want to take out a loan. Management hopes that the machinery will generate a return on investment greater than 15%. The expected effect of the change in credit is detailed below. Should the company adopt the change? Why or why not? Show your calculations. in ($000s) Revenue Profit/Net Income for the year Trade Receivables Net 30 Today 195 17 25 Net 45 Proposed 210 24 50 Change 15 7 25 ACME Inc sells on terms net of 30 days and is considering changing the terms to net 45 days. The company wants the funds to purchase equipment and does not want to take out a loan. Management hopes that the machinery will generate a return on investment greater than 15%. The expected effect of the change in credit is detailed below. Should the company adopt the change? Why or why not? Show your calculations. in ($000s) Revenue Profit/Net Income for the year Trade Receivables Net 30 Today 195 17 25 Net 45 Proposed 210 24 50 Change 15 7 25 ACME Inc sells on terms net of 30 days and is considering changing the terms to net 45 days. The company wants the funds to purchase equipment and does not want to take out a loan. Management hopes that the machinery will generate a return on investment greater than 15%. The expected effect of the change in credit is detailed below. Should the company adopt the change? Why or why not? Show your calculations. in ($000s) Revenue Profit/Net Income for the year Trade Receivables Net 30 Today 195 17 25 Net 45 Proposed 210 24 50 Change 15 7 25
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