0:00
Hello everyone.
00:01
So we will be solving this question in three parts.
00:05
First part, firstly we'll see what all is given.
00:07
So sp is given 45, vc is given 36, then current sales is given 40 ,000 and expected sales is given 42 ,000.
00:33
And required rate of return, that is r is equals to 25%.
00:38
Rr is equal to 25%.
00:38
Rr is equal to 25%.
00:40
Now, first part, that is additional profit contribution from additional sales.
00:49
So we'll just write additional profit that will be equal to 42 ,000 minus 40 ,000 multiplied by 40 minus 36, which will be 18 ,000.
01:15
Part b is change in cost of receivables, that is 2 .36 ,712 .33 minus 1 ,12 ,277 multiplied by 25%...