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NEW QUESTION: 1
The following information regarding a change in credit policy was assembled by the Wilson Wax
Company. The company has a required rate of return of 10 percent and a variable cost ratio of 60 percent.
The pretax cost of carrying the additional investment in receivables, using a 360-day year, would be:
Choice "a" is correct.
Step 1 Determine the average accounts receivable balance and the additional accounts receivable as
Therefore, the accounts receivable balance is $96,000 higher under the new credit policy.
Step 2 Determine the additional INVESTMENT in the additional accounts receivable.
Although Wilson has an additional $96,000 in accounts receievable, Wilson's actual investment in the
additional accounts receivable is only 60% of $96,000 (because variable costs are 60% of sales).
Wilson's investment in the additional accounts receivable is calculated as follows:
$ 96,000 x 60% = $57,600
Step 3 Calculate the cost of carrying the additional accounts receivable.
Wilson's additional investment in accounts receivable is $57,600 and we are given a 10% required rate of
return. This means that Wilson's carrying cost of $5,760 is calculated as follows:
$ 57,600 x 10% = $5,760
Choices "b", "c", and "d" are incorrect, per the above calculation.
NEW QUESTION: 2
Which three IPv6 tunneling rely on embedding the IPv4 address of a tunnel endpoint into the IPv6 address?
E. Static IPv6-in-IPv4
NEW QUESTION: 3
Das Zusammenspiel des Qualitätsmanagements in diesen Prozessen wird von einem EDV-System nicht unterstützt.
NEW QUESTION: 4
Consider the following information: