Warren Motor Company Sells $30 Million of Its Products to Wholesalers

question 7

Multiple Choice

Warren Motor Company sells $30 million of its products to wholesalers on terms of "net 30." Currently, the firm's average collection period is 48 days. To speed up the collection of receivables, Warren is considering offering a cash discount of 2% if customers pay their bills within 10 days. The firm expects 50% of its customers to take the discount and its average collection period to decline to 30 days. The firm's required pretax return (i.e., opportunity cost) on receivables investment is 16%. Determine Warren's pretax earnings on the funds released from the reduction in receivables. (Assume a 365-day year.)

• A) $1,479,452
• B) $236,712
• C) $266,667
• D) $1,082,191

Analyze the impact of the Cold War on domestic and foreign policy formations in the United States.

Critique the U.S. approach to communism and Cold War conflict resolution in the context of diplomatic relations with China and the Soviet Union.

Understand the initial steps in examining the number and capabilities of employees and managers within an organization.

Comprehend the key stages in human resources (HR) forecasting, including determining HR demand and supply.

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Definitions:

SOAR Process

A strategic planning tool aimed at strengthening, optimizing, articulating, and revising the assets and practices of an organization or individual for better performance and results.

Care Area Performance

A metric used in healthcare to evaluate the efficiency and effectiveness of treatment or services in specific areas of patient care.

Opportunities

Chances or situations that present possibilities for progress or achieving something.

Transformational Theories

A set of ideas explaining how individual, organizational, or societal transformation occurs through the actions of leaders or change agents.