Your Current Sales Consist of 45 Units Per Month at a Price

question 5

Multiple Choice

Your current sales consist of 45 units per month at a price of $390 a unit.You are weighing the pros and cons of switching to a net 30 credit policy from your current cash only policy.If you decide to switch your credit policy you also plan to increase the sales price to $410 a unit.The monthly interest rate is 1.4 percent.What is the break-even default rate of the proposed switch?

• A)3.55 percent
• B)3.68 percent
• C)4.29 percent
• D)4.71 percent
• E)4.88 percent

Understand the preparation and significance of closing entries in the accounting process.

Understand the concept and application of closing accounts and their impact on the Income Summary and Retained Earnings.

Calculate and interpret current ratio and its significance in evaluating a company's liquidity.

Differentiate between permanent and temporary accounts and their roles in accounting.

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Definitions:

Cognitive-Affective Personality System (CAPS)

A theory that emphasizes the importance of situational variables and cognitive processes in understanding personality.

Cognitive-Affective Personality System (CAPS)

A psychological theory that emphasizes the interaction of cognitive and emotional processes in shaping personality.

Personality System

The organized set of characteristics, traits, and behaviors that uniquely define how a person interacts with the environment and others.

Insight

The ability to understand the inner nature of things or a deep understanding of a person or situation.