Bass Boats Inc

question 27

Multiple Choice

Bass Boats Inc. currently has sales of $1,000,000, and its days sales outstanding is 30 days. The financial manager estimates that offering longer credit terms would (1) increase the days sales outstanding to 50 days and (2) increase sales to $1,200,000. However, bad debt losses, which were 2 percent on the old sales, would amount to 5 percent on the incremental sales only (bad debts on the old sales would stay at 2 percent) . Variable costs are 80 percent of sales, and Bass has a 15 percent receivables financing cost. What would the annual incremental pre-tax profit be if Bass extended its credit period?

• A) -$20,000
• B) -$10,000
• C) $ 0
• D) $10,000
• E) $20,000

Recognize the significance and impact of major federal securities laws.

Know the filing requirements and timing for various SEC forms.

Understand the components and requirements of financial statements and proxy statements as regulated by the SEC.

Comprehend the exemptions from SEC registration requirements and the conditions under which they apply.