Question
ABC Maintenance Service A.ABC FBO sells maintenance services to various private jet operators.For these, it demands payment within 30 days. It is considering changingthis policy
ABC Maintenance Service
A.ABC FBO sells maintenance services to various private jet operators.For these, it demands payment within 30 days. It is considering changingthis policy to 0.66%/7, net 30. What is the implicit annual rate in the newpolicy? Use a notional purchase of $10,000.
B.ABC's maintenance service business grosses some $22M per year beforediscounts and its average days receivable is 30. If 15% of its clients opt tofollow the new policy, what will be the change in receivables? If ABC's WACCis 7.0%, what are the projected savings of the new policy? If its gross marginis 22%, by how much will gross dollar revenues have to rise to offset the lossfrom discounts? In percent?
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Principles Of Accounting And Principles Of Financial Accounting
Authors: Belverd E Needles, Marian Powers, Susan V Crosson
12th Edition
1133962459, 9781133962458
