Credit policy
Not what you're looking for?
Dear OTA:
Credit policy - As treasurer of the Universal Bed Corp, Aristotle Procrustes is worried about his bad debt ratio, which is currently running at 6%. He believes that imposing a more stringent credit policy might reduce sales by 5% and reduce the bad debt ratio to 4%. If the cost of goods sold is 80% of the selling price, should Mr. Procrustes adopt the more stringent policy?
Purchase this Solution
Solution Preview
Hi there,
<br>
<br>Lets say that for every $10 of sales, they incur 60 cents of bad debt, meaning that they only collect $9.40 of every $10. If they impose that more stringent policy, then sales will drop from $10 to $9.50. As a result, bad debt would then ...
Purchase this Solution
Free BrainMass Quizzes
Organizational Leadership Quiz
This quiz prepares a person to do well when it comes to studying organizational leadership in their studies.
SWOT
This quiz will test your understanding of the SWOT analysis, including terms, concepts, uses, advantages, and process.
MS Word 2010-Tricky Features
These questions are based on features of the previous word versions that were easy to figure out, but now seem more hidden to me.
Operations Management
This quiz tests a student's knowledge about Operations Management
Writing Business Plans
This quiz will test your understanding of how to write good business plans, the usual components of a good plan, purposes, terms, and writing style tips.