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    Kelompok 5 Soal Terjemahan

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    ElgaNurhikmah
    Your first major assignment after a promotion involves overseeing account receivables and inventory management at Ice Nine. You are analyzing a proposed change to relax credit terms from 1/50 net 70 to 2/60 net 90 to secure new sales. This may increase sales by $1 million but also bad debts by 8% of new sales and the average collection period from 60 to 75 days. You need to determine if the increased profit from sales offsets the additional bad debts and costs of more inventory and longer collection periods.

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    Kelompok 5 Soal Terjemahan

    Uploaded by

    ElgaNurhikmah
    98 views1 page
    Your first major assignment after a promotion involves overseeing account receivables and inventory management at Ice Nine. You are analyzing a proposed change to relax credit terms from 1/50 net 70 to 2/60 net 90 to secure new sales. This may increase sales by $1 million but also bad debts by 8% of new sales and the average collection period from 60 to 75 days. You need to determine if the increased profit from sales offsets the additional bad debts and costs of more inventory and longer collection periods.

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    Your first major assignment after a promotion involves overseeing account receivables and inventory management at Ice Nine. You are analyzing a proposed change to relax credit terms from 1/50 net 70 to 2/60 net 90 to secure new sales. This may increase sales by $1 million but also bad debts by 8% of new sales and the average collection period from 60 to 75 days. You need to determine if the increased profit from sales offsets the additional bad debts and costs of more inventory and longer collection periods.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    98 views1 page

    Kelompok 5 Soal Terjemahan

    Uploaded by

    ElgaNurhikmah
    Your first major assignment after a promotion involves overseeing account receivables and inventory management at Ice Nine. You are analyzing a proposed change to relax credit terms from 1/50 net 70 to 2/60 net 90 to secure new sales. This may increase sales by $1 million but also bad debts by 8% of new sales and the average collection period from 60 to 75 days. You need to determine if the increased profit from sales offsets the additional bad debts and costs of more inventory and longer collection periods.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 1

    Your first major assignment after your recent promotion at Ice Nine involves overseeing the

    management of account receivable and inventory. The fisrt item that you must attend to involves a
    proposed change credit policy that involved relaxing credit term from the existing terms 0f 1/50, net
    70 to 2/60 net 90 in hopes of securing new sales. The management of Ice Nine does not expect bad
    debt losses on its current customers to change under the new credit policy. The following information
    should aid you in the analysis of this problem : (source : Financial Management, Principles and
    Aplications, Titman,Keown,Martin,2014, Page 641)
    New Sales level (all credit) $ 8,000,000
    Original sales level (all credit) $ 7,000,000
    Contribution margin 25%
    Percents bad debt losses on new sales 8%
    New average collection period 75 days
    Original average collection period 60 days
    Additional investment in inventory $ 50,000
    Pre tax required rate of return 15%
    New percent cash discount 2%
    Percent of customers taking the new cash discount 50%
    Original percent cash discount 1%
    Percent of cusomers taking the old cash discount 50%
    To help in your decision on relaxing credit terms, you have been asked to respond to the following
    questions :
    a. What determines the size of investment Ice Nine makes in Account Receivables ?
    b. If a firms currently buys from Ice Nine on trade of credit with present terms of 1/50 net to and
    decides to forgo the trade credit discount and pay on the next day, what is the annualized cost to
    that firm of forgoing the discount ?
    c. If Ice Nine changes its trade credit terms to 2/60 net 90, what is the annualized cost to firm that
    buys on credit from Ice Nine and decided to forgo the trade credit discount and pay on the next
    day ?
    d. What is the estimated change in profit resulting from the increased sales less any additional bad
    debts associated with the proposed change in credit policy ?
    e. Estimate the cost of additional investment in account receivable and inventory associated with this
    change in credit policy ?
    f. Estimate the change in the cost of cash discount if the proposed change in credit policy is enacted
    !
    g. Compute the incremental revenues with the incremental costs. Should the proposed change be
    enacted ?

    1 SOAL INI BERSIFAT RAHASIA “HARUS DIKEMBALIKAN” | MILIK UNIVERSITAS MERCU BUANA

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