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Furkat [3]
4 years ago
10

If a company is overly optimistic about debt collection, the company will understate bad debt expense and:

Business
1 answer:
den301095 [7]4 years ago
7 0

Answer:

overstate net income but days to collect will increase.

Explanation:

A bad debt expense is defined when any receivable is no more collectible as the customer is not able to fulfil or satisfy the obligation in order to pay the obligation of paying an outstanding debt because of some financial problems or due to bankruptcy.

Thus when any organization is more optimistic about the debt collection, it will understate the bad debt expenses and will also overstate the net income. But in this case the number of days to collect the payment increases.

You might be interested in
A trader creates a long butterfly spread from options with strike prices $60, $65, and $70 by trading a total of 400 options. Th
malfutka [58]

Answer:

$400

Explanation:

From the question, there is a butterfly spread when a trader buys 100 options with strike prices $60 and $70 and sells 200 options with strike price $65.

The maximum gain is the point where both the stock price and the middle strike price are equal, i.e. equal to $65. At that point, the options payoffs are respectively $500, 0, and 0. By implication, the total payoff is $500.

The set up cost of the butterfly spread can be calculated as follows:

Setup cost = ($11×100) + ($18×100) – ($14×200)

                  = 1,100 + 1,800 – 2,800

Setup cost = $100

Net gain = Options payoffs – Setup cost = $500 - $100 = $400

Therefore, the maximum net gain (after the cost of the options is taken into account) is $400.

3 0
4 years ago
Ursula is allowed to set her own schedules for playtime and for studying. In return, Ursula's mother insists that her daughter k
mr_godi [17]

Ursula's mom is most likely an authoritative parent.

Explanation:

Authoritative parenthood is a childhood style of strong sensitivity and heavy demands. Authoritative parents respond with high expectations to the children's emotional needs. They set boundaries and enforce borders very systematically.

Oppressive and oppressive parents are strict and want their children a lot. Conservative and moist dominant parents, yet conservative and cold oppressive parents.

Authoritative parents discuss their children's laws and explain them. Authoritarian parents require only one path contact.

3 0
3 years ago
When there is no government involvement in answering the three basic economic questions this is which economy?
Dmitry_Shevchenko [17]

When there is no government involvement in answering the three basic economic questions this is Market Economy.

Market

<u>Explanation:</u>

When there is no government interventions in the market system or economy then it is known as Market Economy or Lassez faire.

Here the firms and household determine who sells the goods and who buys it and everything is carried out according to them and there is no government intervention like that of the command economy.

There is a lot of profit for the businessman as the consumers pay as high the price as they want to and no amount is given to the government.

6 0
4 years ago
The term ________ refers to a centralized database that collects the experiences and insights of employees throughout the organi
ollegr [7]
The answer to this question is the knowledge management system. The knowledge management system or KMS is a system that consists of a database of management principles and experiences. This system also stores and retrieves information and knowledge that consists of productivity reports, business analysis, and other company records for easy reference.
6 0
4 years ago
Suppose you invest $5,000 per year, for 10 years, into an account with an annual rate of return of 7%. Deposits are made at the
Debora [2.8K]

Answer:

Explanation:

The timeline would be as follows:

During the first 10 years, we deposit 5,000 at 7% market rate.

Then we withdraw at the beginning of Year eleven during 17 year. The market price for this period is 6%

First Step amount at end of year 10

C * \frac{(1+r)^{time} - 1 }{rate} = FV\\

5,000 * \frac{(1+0.07)^{10} - 1 }{0.07} = FV\\

FV = $69,082.24

Then, we are going to calculate how much can be withdraw during 17 years

At the beginning of the period at 6% rate

C = PV \frac{rate}{1-(1+rate)^{-time} }/ (1+rate)

From the PV formula, we clear the Cuota and then we divide by 1.06 because we are doing an<em> annuity-due. </em><em>The amount is withdraw at the beginning of the period. </em>That's why we add a new element.

C = 69,082.24 \frac{0.06}{1-(1.06)^{-17} } /(1.06)

C = 6220.32

3 0
3 years ago
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