Question
16-5 RECEIVABLES INVESTMENT McEwan Industries sells on terms of 3/10, net 30. Total sales for the year are $1,921,000; 40% of the customers pay on
- 16-5
RECEIVABLES INVESTMENT McEwan Industries sells on terms of 3/10, net 30. Total sales for the year are $1,921,000; 40% of the customers pay on the 10th day and take discounts, while the other 60% pay, on average, 70 days after their purchases.
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What is the days sales outstanding and the average amount of receivables?
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What is the percentage cost of trade credit to customers who take the discount?
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What is the percentage cost of trade credit to customers who do not take the discount and pay in 70 days?
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What would happen to McEwans accounts receivable if it toughened up on its collection policy with the result that all nondiscount customers paid on the 30th day?
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Finance For Normal People
Authors: Meir Statman
1st Edition
019062647X, 978-0190626471
