Question
DEF Co's average monthly cash receipts is P1,500,000. Its average collection period is 10 days. A collection agency has offered to be the company's collector
DEF Co's average monthly cash receipts is P1,500,000. Its average collection period is 10 days. A collection agency has offered to be the company's collector and shorten collection period to four days for a monthly fee of P1,500. The company can invest the excess cash funds in money market placement at a rate of 8%. If the collection agency's offer is accepted what is the annual benefit (loss) ?
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Cambridge IGCSE And O Level Accounting Coursebook
Authors: Catherine Coucom
2nd Edition
1316502775, 978-1316502778
