Don't use chatgpt, I will 5 upvotes Accounts receivable changes with bad debts A firm is evaluating an accounts receivable change that would increase bad debts from 2% to 3% of sales. Sales are currently 50,000 units per month, the selling price is $20 per unit, and the variable cost per unit is $15. As a result of the proposed change, sales are forecast to increase to 80,000 units per month. If the cost of capital is 0.75% per month, should the firm change its credit policy? The cost of the marginal bad debts of the firm is $28000. (Round to the nearest dollar.) The profit contribution from an increase in sales is $___. (Round to the nearest dollar.)

Don't use chatgpt, I will 5 upvotes Accounts receivable changes with bad debts A firm is evaluating an accounts receivable change that would increase bad debts from 2% to 3% of sales. Sales are currently 50,000 units per month, the selling price is $20 per unit, and the variable cost per unit is $15. As a result of the proposed change, sales are forecast to increase to 80,000 units per month. If the cost of capital is 0.75% per month, should the firm change its credit policy? The cost of the marginal bad debts of the firm is $28000. (Round to the nearest dollar.) The profit contribution from an increase in sales is $___. (Round to the nearest dollar.)

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter16: Working Capital Policy And Short-term Financing

Section: Chapter Questions

Problem 25P

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