Fin 419 Week 4 problems P 14-9 P 14-16 - 16131

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Fin 419 Week 4 problems P 14-9 P 14-16

Solution Description

P14-9(WEEK-4)

(a)  Bad Debts currently in $ = 2%* 50,000*20=$  20,000

      Bad Debts under proposed change in $ = 4%* 50,000*20=$ 40,000

(b)  Cost of Bad Debts to the firm= Increase in Bad debt percentage= 40,000-20000= $20,000