A firm is considering relaxing credit standards, which will result in annual sales increasing from $1.5 million to $1
75 million, the cost of annual sales increasing from $1,000,000 to $1,125,000, and the average collection period increasing from 40 to 55 days. The bad debt loss is expected to increase from 1 percent of sales to 1.5 percent of sales. The firm's required return on investments is 20 percent. The firm's cost of marginal investment in accounts receivable is ________. (Assume a 360-day year.)
A) $5,556
B) $9,944
C) $12,153
D) $152,778
C
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Which of the following would not be considered a current asset?
A) long-term investments B) cash C) accounts receivable D) marketable securities
Which of the following is not a characteristic of effective business messages?
A) They provide practical information. B) They present the writer's opinions as facts. C) They state precise audience responsibilities. D) They highlight and summarize essential information. E) They are short.