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Basile [38]
2 years ago
7

Caren's Canoes is considering relaxing its credit standards to encourage more sales. As a result, sales are expected to increase

15 percent from 300 canoes per year to 345 canoes per year. The average collection period is expected to increase to 40 days from 30 days and bad debts are expected to double the current 1 percent level. The price per canoe is $850, the variable cost per canoe is $650 and the average cost per unit at the 300 unit level is $700. The firm's required return on investment is 20 percent. (Assume a 360-day year) What is the cost of marginal investments in accounts receivable under the proposed plan?
Business
1 answer:
tamaranim1 [39]2 years ago
5 0

Answer:

$ 1733

Explanation:

Cost Marginal Investment in Accounts Receivable = Marginal Investment in Accounts Receivable * firm's required return on investment

Marginal Investment in Accounts Receivable = Average Investments Under proposed Plan - Average Investments Under present Plans

Average Investments in Accounts Receivable = Total variable cost of annual sales / Turn over of account receivables

Turn Over of account receivables = 360/ average collection period.

Using above formula for calculation , Answer = $ 8665 * 20% = $ 1733

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Domino Company uses the aging of accounts receivable method to estimate uncollectible accounts expense. Domino began Year 2 with
nignag [31]

Answer:

$5,156

Explanation:

The computation of the uncollectible account expense is shown below:

But for this, first we have to compute the ending balance of allowance that is shown below

Current          $82,000 × 1%  = $820

0-30               $29,500  × 5%  = $1,475

31-60              $7,960 × 10%  = $796

61-90              $4,220  × 25%  = $1,055

Over 90          $3,900 × 50% = $1,950

Total                                            $6,096

Now the uncollectible account expense is

= $6,096 + $2,770 - $3,710

= $5,156          

This is the answer but the same is not provided in the given options

6 0
2 years ago
Suppose, for example, that a sales manager is evaluating the performance of his employees. One employee does not get along well
bulgar [2K]

Answer:

Selective Perception

Explanation:

According to my research on studies conducted by various sociologists, I can say that based on the information provided within the question the manager is exercising Selective Perception. In the context of sociology, Selective Perspective is when an individual decides to not notice certain aspects or traits that cause emotional discomfort and instead focus on the ones that go with our beliefs. Which is what the manager is doing by focusing only on the fact that the salesperson is generating more contracts which is good for the company.

I hope this answered your question. If you have any more questions feel free to ask away at Brainly.

6 0
2 years ago
Why do communities resist programs to educate the public about hurricane hazards? they don't believe they have a hurricane probl
laila [671]
Communities resist programs to educate the public about hurricane hazards because they don't believe they have a hurricane problem; it hasn't happened as long as they can remember.
3 0
2 years ago
PROJECT FOCUS: One day, a sophisticated business man walks into the cafe and asks to speak to the owner. He introduces himself a
Jet001 [13]

Answer:

Explanation:

Solution

At first, we will determine that whether we have communicated to our customers in a past that we will keep their information confidential and never be sold to any other person or business for any future marketing. If we have made such communication, then we should take information confidential and do not give to others.Similarly, if there is no confidentiality communication made in a past, then we can put an offer towards Brawner. We offer him that instead of providing phone numbers and email to him, pay tome, we will email and call the customers and let them know about Brawner and local record store. So in case any customers want something, they will contact directly to you (Brawner) or his shop.

8 0
2 years ago
Stocks that don't pay dividends yet
mariarad [96]

Answer:

horizon value at year 5 = $94.3444

current intrinsic intrinsic value P₀ = $47.73

Assuming that the markets are in equilibrium, Goodwin's current expected dividend yield is and Goodwin's capital gains yield is <u>0(it pays no dividends)</u>.

Goodwin has been very successful, but it hasn't paid a dividend yet. It circulates a report to its key investors containing the following statement:

Goodwin's investment opportunities are poor.

Is this statement a possible explanation for why the firm hasn't paid a dividend yet?

<u>B. False</u>

Generally companies that are experiencing a rapid growth do not pay dividends, because they need all the cash that they can use to finance their expansion. Sometimes mature companies that have a steady growth rate will also choose not to pay dividends because they consider themselves as solid investments and not paying dividends allows them to grow more and should increase stockholders' wealth more.

Explanation:

D₃ = $5.50

D₄ = $7.073

D₅ = $9.096

D₆ = $9.642 (and a constant growth rate of 4.38%

Re = 14.60%

horizon value at year 5 = $9.642 / (14.6% - 4.38%) = $94.3444

intrinsic value P₀ = $94.3444 / 1.146⁵ = $47.73

5 0
2 years ago
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