P14-10 (similar to) Relaxation of credit standards Lewis Enterprises is considering relaxing its credit standards...
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P14-10 (similar to) Relaxation of credit standards Lewis Enterprises is considering relaxing its credit standards to increase is currently sagging sales. As a result of the proposed relaxation, sales are expected to increase by 20% from 10,000 to 12.000 units during the coming year, the average collection period is expected to increase from 50 to 70 days, and bad debts are expected to increase from 15% to 3% of sales The sale price per unit is $40, and the variable cost per uniti 532 The firm's required return on equal risk Investments is 106% Evaluate the proposed relaxation and make a recommendation to the form (Note Assume a 365-day year)
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