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5. The management of Xolo Co has annual credit sales of R20 million and accounts receivable of R4 million. Working capital is financed by

5. The management of Xolo Co has annual credit sales of R20 million and accounts receivable of R4 million. Working capital is financed by an overdraft at 12% interest per year. Assume 365 days in a year. What is the annual finance cost saving if the management reduces the collection period to 60 days? (8 Marks)

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