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Business, 20.11.2019 20:31 meganwintergirl

Global services is considering a promotional campaign that will increase annual credit sales by $480,000. the company will require investments in accounts receivable, inventory, and plant and equipment. the turnover for each is as follows: accounts receivable 6 times inventory 12 times plant and equipment 4 times all $480,000 of the sales will be collectible. however, collection costs will be 4 percent of sales, and production and selling costs will be 77 percent of sales. the cost to carry inventory will be 4 percent of inventory. depreciation expense on plant and equipment will be 5 percent of plant and equipment. the tax rate is 25 percent.

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