David and Sadaf's part for week 3 assignment

David and Sadaf's part for week 3 assignment -...

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The Bandwagonesque Corporation has current annual sales of $5 million. In order to  increase revenues, credit policy will have to be relaxed. This will require increasing credit terms  from the current net 60 days to net 90 days and allow credit terms to a riskier class of  customers.  Based on these changes, revenues are expected to increase to $6 million, representing  a formidable 20% increase. Bad debt should remain the same at 8%. The positive side of  extending credit to a higher risk customer is that the customer is more likely to become a regular  customer. This indicates that there is an even greater chance for a higher increase in revenue.  An incremental analysis change will be conducted for the proposed change in credit policy. Step1 Estimate the change in Profit. = (increase sales
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This note was uploaded on 08/21/2010 for the course FIN FIN370 taught by Professor Mr.garcia during the Fall '09 term at DeVry Long Beach.

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David and Sadaf's part for week 3 assignment -...

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