Magic Enterprises is evaluating the profitability of easing its credit standards. Under its current policy, the firm extends credit only to the firms in credit risk groups 1, 2, 3, and 4. By not extending credit to groups 5 and 6, the firm estimates it loses $1,380,000 in sales annually. The firm's variable cost ratio is 0.82, and the firm requires a 23 percent pretax rate of return on its investments in current assets. If credit is extended to group 5 and group 6, additional inventory investments of $170,000 and $106,000 respectively will be required. Magic wants to determine if extending credit to the one or both two groups would be profitable.
Risk Credit Collection Bad Debt
Group Sales Period (days) Loss Ratio%
1 $2,200,000 23 --
2 3,050,000 28 .20
3 1,720,000 36 .55
4 1,125,000 44 2
5 850,000 59 8
6 530,000 78 14
Extending the credit to the 5th risk group
1) Increase in Contribution= Sales-Variable costs=( 100%-82%)*850000 = $153,000.00
2) Less Incremental Bad debts= 8%*850000 = $68,000.00
Earnings before ...
The solution discusses how Magic Enterprises determines their credit sales.
The delivery of patient care & improvement
Please help me with the following:
Clinical Governance in healthcare is a system through which healthcare organizations are accountable for continuously improving the quality of their services and safeguarding high standards of care (improving the standard of clinical practice), by creating an environment in which clinical excellence will flourish. The three most recognizable components of clinical governance are: clinical effectiveness (including clinical audit), risk management (inc patient safety) and patient focus and public involvement.
In relation to Clinical governance, how can the quality of patient care delivered be improved through clinical governance and to what impact would this have on the patients experience of being a patient?
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