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

question 35

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 would be the incremental bad debt losses if the change were made?

• A) $130,000
• B) $250,000
• C) −$250,000 (bad debt losses would decline)
• D) −$130,000 (bad debt losses would decline)
• E) $620,000

Understand the importance of involving management and building support for change initiatives.

Identify the stages involved in the organizational development process.

Grasp the concept of incremental change and its application in organizational settings.

Understand Kurt Lewin's model of change (unfreeze, change, refreeze) and its application in organizational development.

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Definitions:

Essential Work

Tasks and roles deemed critical to continue operations during emergency situations, often including healthcare, safety, and infrastructure services.

Maintenance Personnel

Workers responsible for the upkeep, repair, and general maintenance of physical infrastructures, machinery, or buildings to ensure operational efficiency and safety.

Work Teams

Groups of employees who collaborate on projects or tasks to achieve common objectives.

On Time Delivery

The process of providing goods or services to customers at the agreed-upon time without delay.