Price Corp. is considering selling to a group of new customers - 4686

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Price Corp. is considering selling to a group of new customers and creating new annual sales of $70,000. 5% will be uncollectible. The collection cost on these accounts is 3.5% of new sales, the cost of producing and selling is 80% of sales and the firm is in the 31% tax bracket. What is the profit on new sales? 

A) $5,554.50 

B) $9,660.00 

C) $7,245.00 

D) none of the above. 

 

Answer: A Difficulty: Hard Type: Application 

 

 

Chapter 8 Sources of Short-Term Financing

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