Finance Assignment | Professional Writing
May 27th, 2020
As treasurer of the Universal Bed Corporation, Aristotle Procrustes is worried about his bad debt ratio, which is currently running at 7.2%. He believes that imposing a more stringent credit policy might reduce sales by 4.8% and reduce the bad debt ratio to 5.2%. Assume current sales of $100.
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a. If the cost of goods sold is 78% of the selling price, calculate the profit under both the current policy and the proposed policy. (Round your answers to 2 decimal places.)
Profit | |
Current policy | $ |
Proposed policy | |
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