Question: XYZ , Inc., spends $ 3 0 0 , 0 0 0 per annum on its collection department. The company has $ 4 0 million
XYZ Inc., spends $ per annum on its collection department. The company has $ million in credit sales, its average collection period is months, and the percentage of baddebt losses is The company believes that, if it were to double its collection personnel, it could bring down the average collection period to months and baddebt losses to The added cost is $ bringing total collection expenditures to $ annually.
Part A
How much account receivable will be decreased if the expansion is adopted?
Group of answer choices
None of them
$
$
$
Part B
How much baddebt losses will be reduced if the expansion is adopted?
Group of answer choices
$
$
$
None of them
Part C
At what opportunity cost will the expansion be breakeven?
Group of answer choices
None of them
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