UglyDoll Custom Plushies Ltd.

Answer of UglyDoll Custom Plushies Ltd. has $15 million in $2 Only (Instant Download)

UglyDoll Custom Plushies Ltd.

2) UglyDoll Custom Plushies Ltd. has $15 million in credit sales per year and on average they are outstanding for 75 days. Each giant custom plushie sells for $1,000 and results in a 10% contribution margin. Receivables are financed via a line of credit at a 12% interest rate. Bad debts total $350,000 annually. The accounting department has a new plan by which it estimates it can eliminate half of the bad debts and reduce the average collection period to 45 days if it is permitted to hire new collections specialists at a cost $170,000 per year. The new plan would result in 2% lost sales. Consider both the existing and the new credit policy and determine if UglyDoll Custom Plushies would be better off with new plan and if so, by how much? Show all your work. (12 Marks)

Price of Answer: Just US$2 only (Instant Download)

Buy Now
The safe, easier way to pay

Need Assistance‚Ķ??  email us at [email protected].

If you need any type of help regarding Homework, Assignments, Projects, Case study, Essay writing, or anything else then just email us at [email protected].  We will get back to you ASAP. Do not forget to maintain the time frame you need your work to be done.