A firm offers terms of 3/15, net 30. Currently, two-thirds of all customers take advantage of the

Question:

A firm offers terms of 3/15, net 30. Currently, two-thirds of all customers take advantage of the trade discount; the remainder pay bills at the due date.

a. What will be the firm's typical value for its accounts receivable period?

b. What is the average investment in accounts receivable if annual sales are $20 million?

c. What would likely happen to the firm's accounts receivable period if it changed its terms to 4/15, net 30?

A firm offers terms of 3/15, net 30. Currently, two-thirds

Accounts Receivable
Accounts receivables are debts owed to your company, usually from sales on credit. Accounts receivable is business asset, the sum of the money owed to you by customers who haven’t paid.The standard procedure in business-to-business sales is that...