Last year the company ABC revenues from sales of bicycles were 900.000$, and the average price of the bicycle was 300$. The terms of payment was 45 days net while variable to fixed cost ratio was 80:20. The company has done some financial investments gaining 20% rate of return im stocks trading. This year's the company board members want to increase sales of bicycles and thus suggest relaxing of credit terms from 45 days to 60 days to all buyers projecting the increase in sales for additional 12%. will be acceptable, having in mind the opportunity in investing in profitable stocks with return of 20%
Last year the company ABC revenues from sales of bicycles were 900.000$, and the average price of the bicycle was 300$. The terms of payment was 45 days net while variable to fixed cost ratio was 80:20. The company has done some financial investments gaining 20% rate of return im stocks trading. This year's the company board members want to increase sales of bicycles and thus suggest relaxing of credit terms from 45 days to 60 days to all buyers projecting the increase in sales for additional 12%. will be acceptable, having in mind the opportunity in investing in profitable stocks with return of 20%
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Last year the company ABC revenues from sales of bicycles were 900.000$, and the average price of the bicycle was 300$. The terms of payment was 45 days net while variable to fixed cost ratio was 80:20. The company has done some financial investments gaining 20%
will be acceptable, having in mind the opportunity in investing in profitable stocks with return of 20%
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education