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  • 1.  Acc receivables management p2 question

    Posted 01-23-2023 01:00 PM
      |   view attached
    If anyone can explain this , I'll be very thankful

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    Sarah Mohamed Refaat Omar
    Executive Officer
    Cairo
    Egypt
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  • 2.  RE: Acc receivables management p2 question

    Posted 01-24-2023 06:14 AM
    Hi

    Here you have to identify the incremental cost of purchasing one-time vs keep purchasing on a monthly basis and multiply by 9% (cost of capital).

    You can do it in different ways:

    1)
    180,000 cases equal 6 months of 30,000 monthly purchases.

    Cost of one-time purchase
    180,000 * $10 = $1,800,000

    Cost of 6 months monthly purchases 
    30,000 * 6 * $12 = $ 2,160,000 

    Incremental cost = $360,000
    Opportunity cost = $360,000 * 9% = 32,400

    2)
    Incremental unit cost $2 ( $12 - $10)

    180,000 equals 6 months of 30,000 monthly purchases.

    Incremental cost =180,000 * $2 = 360,000

    Opportunity cost = $360,000 * 9% = 32,400

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    Brian Ruskolekier
    Controller
    Buenos Aires
    Argentina
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