The Berry Corporation is considering a change in its cash-only policy. The new terms would be net one period. The required return is 1.6% per period. Based on the following information, what is the break-even price per unit that should be charged under the new credit policy? Assume that the sales figure under the new policy is 2,900 units and all other values remain the same. (Round the final answer to 2 decimal places. Omit $ sign in your response.) Price per unit Cost per unit Unit sales per month Current Policy New Policy $ 67 $ 35 $ 65 $ 35 2, 750 2, 900 Break-even price

The Berry Corporation is considering a change in its cash-only policy. The new terms would be net one period. The required return is 1.6% per period. Based on the following information, what is the break-even price per unit that should be charged under the new credit policy? Assume that the sales figure under the new policy is 2,900 units and all other values remain the same. (Round the final answer to 2 decimal places. Omit $ sign in your response.) Price per unit Cost per unit Unit sales per month Current Policy New Policy $ 67 $ 35 $ 65 $ 35 2, 750 2, 900 Break-even price

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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The Branson Corporation is considering a change in its cash-only policy. The new terms would be net one period. The required return is 2.5 percent per period. Price per unit Cost per unit Unit sales per month Current Policy $59 $33 2,450 Break-even quantity New Policy $61 $33 ? What is the break-even quantity for the new credit policy? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
Peanut Inc. is evaluating whether to change its credit terms from 2/10 net 30 to 3/10 net 30. At present, 50% of Peanut's sales are paid at day 10. Regardless of the credit terms, half of the customers who do not take the discount are expected to pay on day 30 whereas the remainder will pay 15 days late (no bad debts exist). But as a result of the higher cash discount offered with the new terms, sales are expected to increase from 757,000 to 801,000 per year. Peanut's variable cost ratio is 75% and its cost of funds is 8.7%. All production costs are paid on the day of the sale. Should the change be made?
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Please solve for all sub-parts of the question displayed on image.
The Branson Corporation is considering a change in its cash-only policy. The new terms would be net one period. The required return is 2 percent per period. Price per unit Cost per unit Current New Policy Policy $ 86 $ 88 $46 $46 Unit sales per month 4,400 ? What is the break-even quantity for the new credit policy? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Answer is complete but not entirely correct. Break-even quantity 4,397.63x
The Branson Corporation is considering a change in its cash-only policy. The new terms would be net one period. The required return is 1.5 percent per period. Price per unit Cost per unit Unit sales per month Current Policy $59 $33 2,450 NPV New Policy $61 $33 2,575 Calculate the NPV of the decision to change credit policies. (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
If a firm buys under terms of 1/15, net 40, but actually pays on the 20th day and still takes the discount, what is the nominal cost of its nonfree trade credit? Assume a 365-day year. Do not round intermediate calculations. Round your answer to two decimal places.
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A store will give you a 1.00% discount on the cost of your purchase if you pay cash today. Otherwise, you will be billed the full price with payment due in 1 month. What is the implicit borrowing rate being paid by customers who choose to defer payment for the month? Note: Do not round Intermediate calculations. Enter your answer as a percent rounded to 2 decimal places. Effective annual rate %
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Axis Wells and Excavation (AWE) currently generates $198,000 in annual credit sales. AWE sells on terms of net 50, and its accounts receivable balance averages $11,000. AWE is considering a new credit policy with terms of net 25. Under the new policy, sales will decrease to $189,000, and accounts receivable will average $12,600. Compute the days sales outstanding (DSO) under the existing policy and the proposed policy. Assume there are 360 days in a year. Round your answers to the nearest whole number. DSOExisting: days DSONew: days