LYD Corp. receives an order from a new customer, amounting $55,000. LYD Corp. uses 45-day credit terms as a standard. The Variable Cost Ratio is 75.00% of Sales, Collection Expense Ratio 15.00% of Sales and the Interest Rate is 13.00% (365 days per year). Instruction: (show your calculations and round to 2 decimal places) Should the order be accepted? Defend your answer.

Principles of Accounting Volume 2
19th Edition
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax
Chapter7: Budgeting
Section: Chapter Questions
Problem 14EA: Halifax Shoes has 30% of its sales in cash and the remainder on credit. Of the credit sales, 65% is...
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LYD Corp. receives an order from a new customer, amounting $55,000. LYD Corp. uses 45-day credit terms as a standard. The Variable Cost Ratio is 75.00% of Sales, Collection Expense Ratio 15.00% of Sales and the Interest Rate is 13.00% (365 days per year).

Instruction: (show your calculations and round to 2 decimal places) Should the order be accepted? Defend your answer.

 

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