Berkeley Prints Berkeley Prints Expects to Have Sales This Year of $15

question 94

Multiple Choice

Berkeley Prints
Berkeley Prints expects to have sales this year of $15 million under its current credit policy. The present terms are net 30; the days sales outstanding (DSO) is 60 days; and the bad debt loss percentage is 5 percent. Also, Berkeley's cost of capital is 15 percent, and its variable costs total 60 percent of sales. Because Berkeley wants to improve its profitability, a proposal has been made to offer a 2 percent discount for payment within 10 days; that is, change the credit terms to 2/10, net 30. The consultants predict that sales would increase by $500,000, and that 50 percent of all customers would take the discount. The new DSO would be 30 days, and the bad debt loss percentage on all sales would fall to 4 percent.
-Refer to Berkeley Prints.What are the incremental pre-tax profits from this proposal?

• A) $283,750
• B) $250,500
• C) $303,250
• D) $493,750
• E) $288,250

Examine the role of social policies and attitudes in perpetuating or challenging social inequalities.

Understand the significance of ascribed and achieved status in determining one’s position within social stratification.

Identify examples of social inequality and stratification in everyday life and societal structures.

Understand the concept of product liability and the conditions under which a person can claim a defective product.

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Definitions:

Clay

A natural, earthy material composed of fine minerals with a grain size of less than 2 micrometers, known for its plasticity when wet and usefulness in ceramics and construction.

Soil Type

A classification based on the physical characteristics of the soil, including texture, fertility, and composition.

Loam

Loam is a fertile soil type that is a balanced mixture of sand, silt, and clay, known for its excellent moisture retention and aeration qualities, suited for agricultural use.

Hydrologic Cycle

The continuous movement of water on, above, and below the surface of the Earth, including processes such as evaporation, condensation, precipitation, and runoff.