Question: please answer this question Little Runabout Inc. makes small trailers for light-duty towing behind SUVs and small pickup trucks. Its trailers typically sell for $2,500.

please answer this question

please answer this question Little Runabout Inc. makes small trailers for light-duty

Little Runabout Inc. makes small trailers for light-duty towing behind SUVs and small pickup trucks. Its trailers typically sell for $2,500. Many of its customers have asked for credit terms to aid in purchasing the trailers. The firm's finance department has estimated the following profile for its light-duty trailers and customer base: Annual sales: 12,000 trailers Annual production costs per trailer: $1,500 Lost sales if credit is not provided for customers: 2,000 trailers Default rate if all customers purchase on credit: 3.009% What is the profit if the firm has a cash-only policy? O $10,000,000 O $25,000,000 O $8,000,000 $12,000,000

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Accounting Questions!