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b) Power Rangers Bhd has annual credit sales of RM30m and allows 90 days' credit it is considering introducing a 2% discount for payment within
b) Power Rangers Bhd has annual credit sales of RM30m and allows 90 days' credit it is considering introducing a 2% discount for payment within 15 days, and reducing the credit period to 60 days. It estimates that 60% of its customer will take advantage of the discount while the volume of sales of the firm is not expected to be affected. The firm finances working capital from an overdraft at a cost of 10% p.a. is the proposed change in policy worth implementing
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