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https://www.accaglobal.com/content/dam/acca/global/PDF-students/2012/pilotPaper.pdf
Dear Sir I am Practicing the 3rd Question of this Paper, Sir in part A my answer to the question is resulting +1366 as a Net Benefit Of Applying new Policy, I have done this question by your method of taking out a difference between old and new receivables and multiplying by Overdraft Interest to get savings, However the answer in my kaplan kit is different, they took out the increase in incremental cost, increase in contribution and so on……. so my answer is incorrect here even though I proved that new policy is profitable?
There are many ways of showing the workings – I do not like the way that Kaplan show them. However what matters is the net benefit (or net extra cost).
If you got the same net benefit then that is fine.
If you got a different figure, then tell me what you got for the individual costs and benefits and I will explain where you went wrong. (Obviously the savings resulting from lower receivables is only one part of it – there are other benefits and costs (the increased sales is a benefit and the discount is a cost).
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