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Acompany thinking about this credit policy to speed up cash collections. The present policy calls for a 2/10 30 cash discount. There policy would call for 4/10.net Sant Currently set its customers in the discount, and it is anticated that this numberwoud go up to 55% with the new discount pocket further anticipated that annual sales would increme troma level of $4545675k analt of the change in the cash discount policy. The Inventory carried by the form is based on economic order Guantity EOL. A haunt sales increase from 15 to 23. The ordering per order is $190 and the carrying out perunt $1.69 the wrot change with the fulfillment of the new discount policy Exchantin Inventory of $11. The cost of goods sold out of niet general and administrative pentes represent 17% of and interests of 14% will only be for the increase in the correlatione Inventory balonces. The main tradit Required. Calculate the percentage charpen carning after tEAT between the current discount policy and the new discount policy 360 day year. NoteThe formed to present thousands of Further information By the end of this problems you are required to establish the percentage ofereces EAT the old policy Further information By the end of this problem you are required to establish the percentage difference in EAT between the old policy file before the proposed dinant and the new policy for the propound other words KA EATEATEATEAT Therefore, you proceed with calculating EAT for each discount policy as you nomully would under the income statement framework. Remember that net sales - Sales - 5 discount Moreoversteeme-Owheating EAT for the old policy e EBIT-EBT When calculating EAT under the new polos increase in arc increase in interest The difference in receivables de rec aftur the proposed counter before the propend discount. This means that for each discount policy You must multiply the collection period day net sale Salary the difference in Inventory Sinate the proposed discount Sink before the proposed count According you must divide 002 the multiply the outcome the av inventory cost per unit for both discount policy frameworks A company is thinking about changing its credit policy to speed up its cash collections. The present policy calls for a 2/10, net 30 cash discount. The new policy would call for a 4/10, net 50 cash discount. Currently, 34% of its customers are taking the discount, and it is anticipated that this number would go up to 55% with the new discount policy. It is further anticipated that annual sales would increase from a level of $414k to $671k as a result of the change in the cash discount policy. The average inventory carried by the firm is based on an economic order quantity (EOQ). Assume that unit sales increase from 15k to 23.3k. The ordering cost per order is $190 and the carrying cost per unit is $1.69 (these values will not change with the fulfillment of the new discount policy). Each unit in inventory has an average cost of $11. The cost of goods sold equates to 60% of net sales, general and administrative expenses represent 17% of net sales, and interest payments of 14% will only be necessary for the increase in the accounts receivable and inventory balances. The firm is in a 37% tax bracket. Required: Calculate the percentage change in earnings after taxes (EAT) between the current discount policy and the new discount policy. Use a 360-day year. Note: The term "K is used to represent thousands ($1,000). Further Information: By the end of this problem, you are required to establish the percentage difference in EAT between the aldolieb Countland Further Information: By the end of this problem, you are required to establish the percentage difference in EAT between the old policy (i.e. before the proposed discount) and the new policy (i.e. after the proposed discount). In other words: %A EAT = (EAT new - EAT id) + EATold Therefore, you proceed with calculating EAT for each discount policy as you normally would under the income statement framework. Remember that net sales - $ sales - $ discount. Moreover, interest expense = $0 when calculating EAT for the old policy [i.e.EBIT = EBT). When calculating EAT under the new policy: $int. exp. = (increase in acc. rec. + increase in inv.) * interest %. The difference in receivables = acc. rec. after the proposed discount - acc.rec. before the proposed discount. This means that for each discount policy, you must multiply the avg collection period x avg daily net sales. Similarly, the $ difference in inventory = $inv. after the proposed discount - $ inv. before the proposed discount. Accordingly, you must divide EOQ + 2 then multiply the outcome x the $ avg inventory cost per unit for both discount policy frameworks. % IROUND YOUR ANSWER TODECIMA A company is thinking about changing its credit policy to speed up its cash collections. The present policy calls for a 2/10.net 30 cash discount. The new policy would call for a 4/10, net 50 cash discount Currently, 37% of its customers are taking the discount, and it is anticipated that this number would go up to 53% with the new discount policy. It is further anticipated that annual sales would increase from a level of $462k to $676k as a result of the change in the cash discount policy. The average Inventory carried by the firm is based on an economic order quantity (EOQ). Assume that unit sales increase from 17k to 236. The ordering cost per order is $192 and the carrying cost per unit is $1.73 (these values will not change with the fulfillment of the new discount policy). Each unit in inventory has an average cost of $10. The cost of goods sold equates to 62% of net sales, general and administrative expenses represent 16% of net sales, and interest payments of 13% will only be necessary for the increase in the accounts recelyable and inventory balances. The firm is in a 40% tax bracket. Required: Calculate the percentage change in earnings after taxes (EAT) between the current discount policy and the new discount policy. Use a 360-day year. Note: The term "Kis used to represent thousands (x $1,000). Further Information: By the end of this problem, you are required to establish the percentage difference in EAT between the old policy (.e. before the proposed discount) and the new policy (.e. after the proposed discount). In other words: %EAT = {EATH-EATod) + EATold Therefore, you proceed with calculating EAT for each discount policy as you normally would under the income statement framework. Remember that net sales - $ sales - $discount. rur ICE TUTTILIUI. By the end of this problem, you are required to establish the percentage difference in EAT between the old policy (i.e. before the proposed discount) and the new policy (.e. after the proposed discount). In other words: %A EAT = (EAT new - EAT old) + EATold Therefore, you proceed with calculating EAT for each discount policy as you normally would under the income statement framework. Remember that net sales = $ sales - $ discount Moreover, interest expense = $0 when calculating EAT for the old policy [i.e.EBIT = EBT). When calculating EAT under the new policy: $int. exp. = (increase in acc. rec. +increase in inv.) x interest %. The difference in receivables = acarea after the proposed discount - acc. rec. before the proposed discount. This means that for each discount policy, you must multiply the avg collection period x avg dally net sales. Similarly, the $ difference in inventory = $ inv. after the proposed discount - $ inv. before the proposed discount. Accordingly, you must divide EOQ + 2 then multiply the outcome x the $ avg inventory cost per unit for both discount policy frameworks. %(ROUND YOUR ANSWER TO 2 DECIMAL PLACES. FOR EXAMPLE: 17.23) Acompany thinking about this credit policy to speed up cash collections. The present policy calls for a 2/10 30 cash discount. There policy would call for 4/10.net Sant Currently set its customers in the discount, and it is anticated that this numberwoud go up to 55% with the new discount pocket further anticipated that annual sales would increme troma level of $4545675k analt of the change in the cash discount policy. The Inventory carried by the form is based on economic order Guantity EOL. A haunt sales increase from 15 to 23. The ordering per order is $190 and the carrying out perunt $1.69 the wrot change with the fulfillment of the new discount policy Exchantin Inventory of $11. The cost of goods sold out of niet general and administrative pentes represent 17% of and interests of 14% will only be for the increase in the correlatione Inventory balonces. The main tradit Required. Calculate the percentage charpen carning after tEAT between the current discount policy and the new discount policy 360 day year. NoteThe formed to present thousands of Further information By the end of this problems you are required to establish the percentage ofereces EAT the old policy Further information By the end of this problem you are required to establish the percentage difference in EAT between the old policy file before the proposed dinant and the new policy for the propound other words KA EATEATEATEAT Therefore, you proceed with calculating EAT for each discount policy as you nomully would under the income statement framework. Remember that net sales - Sales - 5 discount Moreoversteeme-Owheating EAT for the old policy e EBIT-EBT When calculating EAT under the new polos increase in arc increase in interest The difference in receivables de rec aftur the proposed counter before the propend discount. This means that for each discount policy You must multiply the collection period day net sale Salary the difference in Inventory Sinate the proposed discount Sink before the proposed count According you must divide 002 the multiply the outcome the av inventory cost per unit for both discount policy frameworks A company is thinking about changing its credit policy to speed up its cash collections. The present policy calls for a 2/10, net 30 cash discount. The new policy would call for a 4/10, net 50 cash discount. Currently, 34% of its customers are taking the discount, and it is anticipated that this number would go up to 55% with the new discount policy. It is further anticipated that annual sales would increase from a level of $414k to $671k as a result of the change in the cash discount policy. The average inventory carried by the firm is based on an economic order quantity (EOQ). Assume that unit sales increase from 15k to 23.3k. The ordering cost per order is $190 and the carrying cost per unit is $1.69 (these values will not change with the fulfillment of the new discount policy). Each unit in inventory has an average cost of $11. The cost of goods sold equates to 60% of net sales, general and administrative expenses represent 17% of net sales, and interest payments of 14% will only be necessary for the increase in the accounts receivable and inventory balances. The firm is in a 37% tax bracket. Required: Calculate the percentage change in earnings after taxes (EAT) between the current discount policy and the new discount policy. Use a 360-day year. Note: The term "K is used to represent thousands ($1,000). Further Information: By the end of this problem, you are required to establish the percentage difference in EAT between the aldolieb Countland Further Information: By the end of this problem, you are required to establish the percentage difference in EAT between the old policy (i.e. before the proposed discount) and the new policy (i.e. after the proposed discount). In other words: %A EAT = (EAT new - EAT id) + EATold Therefore, you proceed with calculating EAT for each discount policy as you normally would under the income statement framework. Remember that net sales - $ sales - $ discount. Moreover, interest expense = $0 when calculating EAT for the old policy [i.e.EBIT = EBT). When calculating EAT under the new policy: $int. exp. = (increase in acc. rec. + increase in inv.) * interest %. The difference in receivables = acc. rec. after the proposed discount - acc.rec. before the proposed discount. This means that for each discount policy, you must multiply the avg collection period x avg daily net sales. Similarly, the $ difference in inventory = $inv. after the proposed discount - $ inv. before the proposed discount. Accordingly, you must divide EOQ + 2 then multiply the outcome x the $ avg inventory cost per unit for both discount policy frameworks. % IROUND YOUR ANSWER TODECIMA A company is thinking about changing its credit policy to speed up its cash collections. The present policy calls for a 2/10.net 30 cash discount. The new policy would call for a 4/10, net 50 cash discount Currently, 37% of its customers are taking the discount, and it is anticipated that this number would go up to 53% with the new discount policy. It is further anticipated that annual sales would increase from a level of $462k to $676k as a result of the change in the cash discount policy. The average Inventory carried by the firm is based on an economic order quantity (EOQ). Assume that unit sales increase from 17k to 236. The ordering cost per order is $192 and the carrying cost per unit is $1.73 (these values will not change with the fulfillment of the new discount policy). Each unit in inventory has an average cost of $10. The cost of goods sold equates to 62% of net sales, general and administrative expenses represent 16% of net sales, and interest payments of 13% will only be necessary for the increase in the accounts recelyable and inventory balances. The firm is in a 40% tax bracket. Required: Calculate the percentage change in earnings after taxes (EAT) between the current discount policy and the new discount policy. Use a 360-day year. Note: The term "Kis used to represent thousands (x $1,000). Further Information: By the end of this problem, you are required to establish the percentage difference in EAT between the old policy (.e. before the proposed discount) and the new policy (.e. after the proposed discount). In other words: %EAT = {EATH-EATod) + EATold Therefore, you proceed with calculating EAT for each discount policy as you normally would under the income statement framework. Remember that net sales - $ sales - $discount. rur ICE TUTTILIUI. By the end of this problem, you are required to establish the percentage difference in EAT between the old policy (i.e. before the proposed discount) and the new policy (.e. after the proposed discount). In other words: %A EAT = (EAT new - EAT old) + EATold Therefore, you proceed with calculating EAT for each discount policy as you normally would under the income statement framework. Remember that net sales = $ sales - $ discount Moreover, interest expense = $0 when calculating EAT for the old policy [i.e.EBIT = EBT). When calculating EAT under the new policy: $int. exp. = (increase in acc. rec. +increase in inv.) x interest %. The difference in receivables = acarea after the proposed discount - acc. rec. before the proposed discount. This means that for each discount policy, you must multiply the avg collection period x avg dally net sales. Similarly, the $ difference in inventory = $ inv. after the proposed discount - $ inv. before the proposed discount. Accordingly, you must divide EOQ + 2 then multiply the outcome x the $ avg inventory cost per unit for both discount policy frameworks. %(ROUND YOUR ANSWER TO 2 DECIMAL PLACES. FOR EXAMPLE: 17.23)