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Torque Engine Company is considering opening a plant in China. It will cost $3,500,000 to set up the plant and $800,000 to train employees. An additional $160,000 will be spent to build relationships with the local suppliers. The company anticipates gross profit of $4,500,000 from this new plant. Do the benefits outweigh the costs or do the costs outweigh the benefits, and by how much?
Americans
are citizens of the United States of America or individuals closely associated with the country.
Bad Debts
Accounts receivable that a company does not expect to collect because customers are unable to pay their debts.
Credit Sales
Sales made by a business where the payment is received after the sale has been made, typically recorded as accounts receivable.
Adjustment
Entries made in preparing financial statements to allocate expenses or revenues to the appropriate accounting period.
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