The account under consideration was Monique Fashion . They were asking for $1 mi

Question

The account under consideration was Monique Fashion . They were asking for $1 million for credit purchases. Based on Monique's Dun &Bradstreet rating and other industry data, there appeared to be a five percent probability of non-payment if credit were extended.The collection costs to service the account were four percent of sales and the production and selling costs were 85percent of sales.Any profits would be taxed at a 35 percent rate. Ruth and Jim determined that accounts receivable turnover would be three times.The firm had a required reutrn on investment of 14 percent.

Q1)Using techniques form making the sales to Monique Fashion Stores.

Q2) Ammume the only new investment would be in accounts receivable. Based on the turnover ratio of three times, What would the investment in accounts receivable be?

Q3)Comute the return on accounts receivable based on your answer to questions one and two.

Q4) Given that the firm has a required return on investment of 14percent, should Landis Apparel Co. sell to MOnique Fashion Stores?

Q5) If the account receivable turnover ratio were four times and the other percentages were the same, should Landis Apparel Co make the sales.

Explanation / Answer

Hi,

Fashion marketing techniques apply many of the same marketing strategies that large and small businesses use. Fashion marketing includes market research, advertising and promotion. Research gathers information about the market for a particular brand or product. Advertising helps generate sales, and promotion increases brand or product awareness. Some fashion marketing techniques include fashion events, print publications, press releases and media relations, digital media and product placement.

Fashion marketers conduct promotional events. Product launch events invite the media and public or private guests to learn about new product offerings such as jewelry and other accessories. Runway events showcase fashion apparel that is worn by models. Spectators view the models to see how the clothing fits and evaluate the overall look. Other events involve hosting or sponsoring charity events and causes that help build brand awareness.

Print Publication

Fashion marketers use print publications to promote the brand or product offering. Print publications include the brand's self-published magazines, trade and consumer magazine advertisement, mailings and newsletters that feature individual products, flyers and posters at store locations, point-of-purchase announcements that are placed at the checkout counter, product inserts that are included with product purchases and billboard ads along highways and city streets.

Press Releases

Fashion marketers create and distribute press releases. Fashion marketers use press releases to announce the brand

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