ABC sells on credit terms of 2/10, n/30. Daily sales average 200 units at P2,500 each throughout the 365-day year. All sales are on credit. On average, 40% take the cash discount by paying on tenth day while the remaining 60% pay on the 30th day. It is planning to change the credit terms to 2/10, n/25. If this change was done, daily sales will be 180 units. Around 45% will pay on the tenth day while the remaining 55% will pay on the 25th day. 4. What will be the new average accounts receivable balance based on the given? 5. What will be the new average collection period of the receivables in days? 6. What will be the new receivable turnover? Round off to two decimal places.
ABC sells on credit terms of 2/10, n/30. Daily sales average 200 units at P2,500 each throughout the 365-day year. All sales are on credit. On average, 40% take the cash discount by paying on tenth day while the remaining 60% pay on the 30th day. It is planning to change the credit terms to 2/10, n/25. If this change was done, daily sales will be 180 units. Around 45% will pay on the tenth day while the remaining 55% will pay on the 25th day. 4. What will be the new average accounts receivable balance based on the given? 5. What will be the new average collection period of the receivables in days? 6. What will be the new receivable turnover? Round off to two decimal places.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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ABC sells on credit terms of 2/10, n/30. Daily sales average 200 units at P2,500 each throughout the 365-day year. All sales are on credit. On average, 40% take the cash discount by paying on tenth day while the remaining 60% pay on the 30th day. It is planning to change the credit terms to 2/10, n/25. If this change was done, daily sales will be 180 units. Around 45% will pay on the tenth day while the remaining 55% will pay on the 25th day.
4. What will be the new average accounts receivable balance based on the given?
5. What will be the new average collection period of the receivables in days?
6. What will be the new receivable turnover? Round off to two decimal places.
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