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-- Discussion Question:

Mr. Student has recently graduated from a local business school. He joined Personnel Development Foundation (PDF) as a Junior Consultant Officer in Grade Alpha a week ago. PDF provides following professional services to its clients; employee recruitment, training & development, succession planning, and compensation & retention plans etc. At PDF, Mr. Student has been given a task to develop aptitude tests for the applicants applying for the jobs in the area of Accounting and Finance. One of the questions developed by him is as under;



Marketing expenses of Clients Services Associates (CSA) are estimated at 10% of the next year's sales. Administrative expenses for the year, excluding bad debts are 5% of sales but 8% of cost of sales. Bad debts are estimated at 2.5% of the sales. Earnings after Tax (EAT) are predicted at Rs. 29,250. Tax rate is 35%.



You are required to find out the following:

a) Develop a profit equation from the above data with values therein to find EAT.



b) Whether the above estimates are in favor of CSA or not? Justify your answer while not exceeding a limit of 25 words.






Important Instructions:



1. Your discussion must be based on logical facts.

2. The GDB will remain open for 2 working days/ 48 hours. (Change if more days are allowed)

3. Do not copy or exchange your answer with other students. Two identical / copied comments will be marked Zero (0) and may damage your grade in the course.

4. Obnoxious or ignoble answer should be strictly avoided.

5. Questions / queries related to the content of the GDB, which may be posted by the students on MDB or via e-mail, will not be replied till the due date of GDB is over.



Ø For Detailed Instructions please see the GDB Announcement

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