Sales Intelligence Indicates That an Increase in the Company's Average

question 15

Multiple Choice

Sales intelligence indicates that an increase in the company's average collection period from 32 days to 42 days will increase annual sales revenue by 12% from $9,855,000. All sales are on credit. The company's cost of capital is 9%, its cost of goods sold is 60% of revenue and fixed costs are $2,463,000. After consideration for incremental financing costs, how much of an increase in net profit would the company would achieve?

• A) $9,331
• B) $49,434
• C) $102,680
• D) $436,493
• E) $463,709

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Definitions:

Supertasters

Individuals with an enhanced genetic sensitivity to certain tastes, particularly bitter flavors.

Olfactory Epithelium

The specialized tissue inside the nasal cavity involved in smell; it houses olfactory receptors that detect odors.

Hypothalamus

A small region of the brain that's crucial for hormone production and helps to regulate body temperature, mood, hunger, and sleep.

Amygdala Lesion

Damage to the amygdala, a part of the limbic system responsible for emotions, decision-making, and memory, which can affect emotion and behavior.