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appiahnimo · Jul 13, 2012, 02:39 AM

16.Kelly manufacturing is contemplating the institution of stricter collection policies. The firms current sales are 720000 a year. With collection cost of 20000 annually, bad debt losses are currently 4 percent of sales and the average collection period is 60 days. Kelly believes that by spending an addition 20000 it can reduce bad debt losses to 2 percent of sales and reduce the average collection period to 35 days. However, the stricter policies are expected to reduce sales by 50000 a year. If variable costs are 70 percent of sales and Kelly has an opportunity cost of 20 percent, should the stricter terms be implemented

appiahnimo · Jul 13, 2012, 02:42 AM

16.Kelly manufacturing is contemplating the institution of stricter collection policies. The firms current sales are 720000 a year. With collection cost of 20000 annually, bad debt losses are currently 4 percent of sales and the average collection period is 60 days. Kelly believes that by spending an addition 20000 it can reduce bad debt losses to 2 percent of sales and reduce the average collection period to 35 days. However, the stricter policies are expected to reduce sales by 50000 a year. If variable costs are 70 percent of sales and Kelly has an opportunity cost of 20 percent, should the stricter terms be implemented

Curlyben · Jul 13, 2012, 02:45 AM

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