Marginal investment in accounts receivable
WebJul 16, 2024 · The firm is considering an accounts receivable change that will result in a 20% increase in sales and a 20% increase in the average collection period. No. change in bad debts is expected. The firm’s equal-risk opportunity cost on its investment in accounts receivable is 14%. (Note: Use a 365-day year.) a. Webarginal investment in AR = 43,835.62 - 10,520.55 = 33,315.07Cost (saving) of marginal investment in AR = 10% x 33,315.07 = +$3,331.51 c) Cost of cash discount:Cash discount x % of sales taking discount x proposed sales= 12% x 80% x 600 units x $2200 per unit = -$126,720d) Net benefit/loss:Additional profit = $60,000+ saving from marginal …
Marginal investment in accounts receivable
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WebHandout - Receivables Management Discussion and Practice Questions on Receivables Management University University of the East (Philippines) Course Managerial Accounting (BSA 3102) Academic year:2024/2024 Helpful? 12 Comments Please sign inor registerto post comments. Students also viewed WebJul 26, 2024 · It is typical for a business to perceive their Accounts Receivable as a cash equivalent. Sadly this short term asset has a lot of differences that are commonly overlooked, such as, the cost of capital, doubtful accounts, and payment/collections expense. The following infographic draws attention to these overlooked costs of …
WebWhat is the cost of marginal investments in accounts receivable under the proposed plan? (See Table 15.5) A. $1,733 B. $1,867 C. $1,817 D. $1,617 Accounting Business Financial Accounting FIN 504 Answer & Explanation Solved by verified expert All tutors are evaluated by Course Hero as an expert in their subject area. Answered by tosh0883 WebMonitored all high risk/marginal accounts in 14 states low/medium risk accounts in 7 states. Employed a flexible, innovative approach to credit …
WebMar 11, 2024 · Accounts receivable changes without bad debts Clear Glass Company sells glass containers. It reported total sales of $1,580,000, with 60% of the sales on credit. Ittakes 60 days to collect accounts receivable. The selling price is $20 per container while the variable cost is $15 per container. WebMar 4, 2024 · Calculate the cost of the marginal investment in accounts receivable. Tara’s Textiles currently has credit sales of $360 million per year and an average collection period of 60 days. Assume that the price of Tara’s products is $60 per unit and that the variable …
WebThe firm’s equal-risk opportunity cost on its investment in accounts receivable is 14%. ( Note: Use a 365-day year.) Calculate the additional profit contribution from sales that the firm will realize if it makes the proposed change. What marginal investment in accounts receivable will result?
WebSep 26, 2024 · A business that has credit sales of around $10,000 per month and a long collection period like 60 days has around $18,000 of investment in accounts receivable. A business that has $100,000 of credit sales in a year and a more typical 30-day period may … delta 8 and dry mouthWebCost of marginal investment in accounts receivable: Marginal investment in AR $23,830,193 Required return × 0.14 Cost of marginal investment in AR $ 3,336,227 d. The additional profitability of $6,000,000 exceeds the additional costs of $3,336,227. delta 7 setting shower headWeb41) What is the cost of marginal investments in accounts receivable under the proposed plan? (See Table 14.5) A) $1,817. B) $1,867. C) $1,733. D) $1,617. 42) What is the cost of marginal bad debts under the proposed plan? (See Table 14.5) A) $383. B) $765. C) … delta 8 and 10 psychosisWebCost of marginal investment in accounts receivable: Marginal investment in Accounts Receivable $23,830,193 Required return 0.14 Cost of marginal investment in A/R $3,336,227 d. The $6,000,000 additional profitability exceeds the additional costs of $3,336,227. fetch mini vape issues with screenWebThe firm's required return on investments is 20 percent. Assuming a 365-day year, the firm's cost of marginal investment in accounts receivable is $______. (Please calculate the arithmetic solution and show your work) Expert Answer … fetch miragepetproducts.comWebCost of marginal investment in accounts receivable: Marginal investment in AR $23,830,193 Required return 0.14 Cost of marginal investment in AR $ 3,336,227 d. The additional profitability of $6,000,000 exceeds the … fetch mini set top boxWebJun 30, 2024 · Accounts Receivable Turnover Ratio = $100,000 - $10,000 / ($10,000 + $15,000)/2 = 7.2. In financial modeling, the accounts receivable turnover ratio is used to make balance sheet forecasts. The AR balance is based on the average number of days in which revenue will be received. Revenue in each period is multiplied by the turnover days … delta 8 and headaches