CMA Study Group

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  • 1.  CMA PART 2 QUESTION

    Posted 16 days ago
    Dear Friends,

    How can I solve this problem?

    Regards

    A company is reviewing its trade credit policy with respect to the small retailers to which it sells. Four plans have been studied and the results are as follows:
    Annual
    Bad
    Collection
    Accounts
    Plan
    Revenue
    Debt
    Costs
    Receivable
    Inventory
    A
    $200,000
    $ 1,000
    $1,000
    $20,000
    $40,000
    B
      250,000
       3,000
      2,000
      40,000
      50,000
    C
      300,000
       6,000
      5,000
      60,000
      60,000
    D
      350,000
     12,000
      8,000
      80,000
      70,000
    The information shows how various annual expenses, such as bad debts and the cost of collections, change as sales change. The average balance of accounts receivable and inventory have also been projected. The cost of the product to the company is 80% of the selling price, after-tax cost of capital is 15%, and the effective income tax rate is 30%. What is the optimal plan for the company to implement?

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    TIMUCIN ONER
    Director/Manager
    ANTALYA
    Turkey
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  • 2.  RE: CMA PART 2 QUESTION

    Posted 15 days ago
    Hi

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    LAKHAN ADBALE
    Accountant
    RAJURA MH
    India
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