Gitman: Principl Manageri Finance_15 (15th Edition) (What's New in Finance)
Gitman: Principl Manageri Finance_15 (15th Edition) (What's New in Finance)
15th Edition
ISBN: 9780134476315
Author: Chad J. Zutter, Scott B. Smart
Publisher: PEARSON
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Chapter 15, Problem 15.8P

a.

Summary Introduction

To determine: The additional profit contribution from sales that the firm will realize if it makes the proposed change.

b.

Summary Introduction

To determine: The marginal investment in account receivables.

c.

Summary Introduction

To determine: The cost of the marginal investment in account receivables.

d.

Summary Introduction

To discuss: The firm implements the proposed change and other information would be helpful in your analysis.

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Choose the correct letter and provide solution A firm has total annual sales (all credit) of P100,000.00 and accounts receivable of P20,000.00. How rapidly (in how many days) must accounts receivable be collected if management wants to reduce the accounts receivable to P15,000.00? *a. 22.8 daysb. 34.8 daysc. 44.8 daysd. 52.8 dayse. 54.8 days
Problem 3. Regent Rug Repair Company is trying to decide whether it should relax its credit standards. The firm repairs  rugs per year at an average price of  each. Bad debt expenses are  of sales, the average collection period is  days, and the variable cost per unit is . Regent expects that if it does relax its credit standards, the average collection period will increase to  days and that bad debts will increase to  of sales. Sales will increase by  repairs per year. If the firm has a required rate of return on equal-risk investments of , what recommendation would you give the firm? Use your analysis to justify your answer (use a 365-day year)

Chapter 15 Solutions

Gitman: Principl Manageri Finance_15 (15th Edition) (What's New in Finance)

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