Bugle Boy Company has an opportunity cost of funds of 10 percent and a credit policy...

Question

Question

Bugle Boy Company has an opportunity cost of funds of 10 percent and a credit policy based on net 45 days. If all of its cust

business finance

Add a comment Improve this question Transcribed image text

Answer 1

Answer #1

Answer: opportunity Cost of fonds = 10% Credit Period 45 days Increase in Sales & Proposed Sales - Bon Current Sales = 5.82 -

Add a comment

Answer 2

Similar Homework Help Questions

Bugle Boy Company has an opportunity cost of funds of 10 percent and a credit policy...

Bugle Boy Company has an opportunity cost of funds of 10 percent and a credit policy based on net 45 days. If all of its customers adhere to the stated terms and annual sales increase from $4.04 million to $5.98 million, what will be the increased cost of funds tied up in accounts receivable?
The Boyd Corporation has annual credit sales of $1.93 million. Current expenses for the collection department...

The Boyd Corporation has annual credit sales of $1.93 million. Current expenses for the collection department are $41,000, bad-debt losses are 1.7%, and the days sales outstanding is 30 days. The firm is considering easing its collection efforts such that collection expenses will be reduced to $24,000 per year. The change is expected to increase bad-debt losses to 2.7% and to increase the days sales outstanding to 45 days. In addition, sales are expected to increase to $1,955,000 per year....
1.2. Receivables Investment Snider Industries sells on terms of 2/10, net 35. Total sales for the...

1.2. Receivables Investment Snider Industries sells on terms of 2/10, net 35. Total sales for the year are $500,000. Thirty percent of customers pay on the 10th day and take discounts; the other 70% pay, on average, 40 days after their purchases. Assume a 365-day year. a. What is the days sales outstanding? Do not round intermediate calculations. Round your answer to the nearest whole number. days b. What is the average amount of receivables? Do not round intermediate calculations....

The Boyd Corporation has annual credit sales of $2.48 million. Current expenses for the collection department are $35,00...

The Boyd Corporation has annual credit sales of $2.48 million. Current expenses for the collection department are $35,000, bad-debt losses are 1.7%, and the days sales outstanding is 30 days. The firm is considering easing its collection efforts such that collection expenses will be reduced to $27,000 per year. The change is expected to increase bad-debt losses to 2.7% and to increase the days sales outstanding to 45 days. In addition, sales are expected to increase to $2,505,000 per year....
OB1 Sabres Ltd. has determined that product sales are not what they could be because they...

OB1 Sabres Ltd. has determined that product sales are not what they could be because they have unused capacity. As a result, the company is considering adjusting its marketing strategy. At present, all sales to distributors are on a cash basis, but the competition offers credit terms. Similar credit terms for OB1 Sabres have been suggested. Research suggests that sales in the upcoming year would jump from $4.355 million annually to $5,61 million with credit terms of 1/10, net 30....
Cost of forgoing discount

To finance additional inventory, Arbutus Ltd. is considering forgoing the cash discount on all of its purchases currently offered on terms of 2/10, net 45. No payments will be stretched. Annual purchases are $9.21 million. a. Calculate the additional financing available to Arbutus Ltd. by forgoing the cash discount. (Use 365 days in a year. Do not round intermediate calculations. Enter answer in whole dollar, not in millions. Don't discount gross purchases to arrive at the accounts payable positions.) Additional financing available $ b. Calculate the annual...

Receivables Investment Snider Industries sells on terms of 2/10, net 25. Total sales for the year...

Receivables Investment Snider Industries sells on terms of 2/10, net 25. Total sales for the year are $1,500,000. Thirty percent of customers pay on the 10th day and take discounts; the other 70% pay, on average, 30 days after their purchases. Assume a 365-day year. A. What is the days sales outstanding? Do not round intermediate calculations. Round your answer to the nearest whole number. 24 days B. What is the average amount of receivables? Do not round intermediate calculations....
eceivables Investment Snider Industries sells on terms of 2/10, net 35. Total sales for the year...

eceivables Investment Snider Industries sells on terms of 2/10, net 35. Total sales for the year are $1,900,000. Thirty percent of customers pay on the 10th day and take discounts; the other 70% pay, on average, 40 days after their purchases. Assume a 365-day year. What is the days sales outstanding? Do not round intermediate calculations. Round your answer to the nearest whole number. days What is the average amount of receivables? Do not round intermediate calculations. Round your answer...
Leyton Lumber Company has sales of $12 million per year, all on credit terms calling for...

Leyton Lumber Company has sales of $12 million per year, all on credit terms calling for payment within 30 days, and its accounts receivable are $2.46 million. Assume 365 days in year for your calculations. What is Leyton's DSO? Do not round intermediate calculations.Round your answer to two decimal places. days What would DSO be if all customers paid on time? Do not round intermediate calculations. Round your answer to two decimal places. days How much capital would be released...

I need help with this question. it is an Accounting question . Attempts: 0 Keep the...

I need help with this question. it is an Accounting question . Attempts: 0 Keep the Highest: 0/3 1. Problem 22-05 (Relaxing Collection Efforts) eBook 1 Problem Walk-Through Relaxing Collection Efforts The Boyd Corporation has annual credit sales of $2.72 million. Current expenses for the collection department are $45,000, bad-debt losses are 2%, and the days sales outstanding is 30 days. The firm is considering easing its collection efforts such that collection expenses will be reduced to $27,000 per year....

Bugle Boy Company has an opportunity cost of funds of 10 percent and a credit policy...

Homework Answers