3. Answer the following questions based on the information below Proposed credit policy (net 30) Current credit policy (n/a) Price (RO) Variable cost per unit (RO) Quantity Monthly rate 15 15 10 11 100,000 140,000 1.20% a. What is the incremental cash flows from switching credit policies? b. What is the cost of switching? c. What is your recommendation? d. What is the break-even sales increase? Interpret.
3. Answer the following questions based on the information below Proposed credit policy (net 30) Current credit policy (n/a) Price (RO) Variable cost per unit (RO) Quantity Monthly rate 15 15 10 11 100,000 140,000 1.20% a. What is the incremental cash flows from switching credit policies? b. What is the cost of switching? c. What is your recommendation? d. What is the break-even sales increase? Interpret.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Transcribed Image Text:3.
Answer the following questions based on the
information below
Proposed credit
policy (net 30)
Current credit
policy (n/a)
Price (RO)
Variable cost per
unit (RO)
Quantity
Monthly rate
15
15
10
11
100,000
140,000
1.20%
Transcribed Image Text:a. What is the incremental cash flows from switching
credit policies?
b.
What is the cost of switching?
c. What is your recommendation?
d. What is the break-even sales increase? Interpret.
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