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Details Present Plan Plan A Plan B Credit term 2/10 n /30 2/10 n/ 40 2/10 n / 60 sales 75 millions 5% 7 %
Details
Present Plan
Plan A
Plan B
Credit term
2/10 n /30
2/10 n/ 40
2/10 n / 60
sales
75 millions
5%
7%
Amount received in discount period
25%
25%
25%
Investment cost
10 % of receivables
10 % of change in receivables
10 % of sales receivables
Profit rate
25 % of sales
25 % of sales
25 % of sales
Bad debts cost
2 % of sales
2 % of sales
2 % of sales
Cash Sales
10 millions
10 millions
10 millions
Should company change the credit term or not
Details | Present Plan | Plan A | Plan B |
Credit term | 2/10 n /30 | 2/10 n/ 40 | 2/10 n / 60 |
sales | 75 millions | 5% | 7% |
Amount received in discount period | 25% | 25% | 25% |
Investment cost | 10 % of receivables | 10 % of change in receivables | 10 % of sales receivables |
Profit rate | 25 % of sales | 25 % of sales | 25 % of sales |
Bad debts cost | 2 % of sales | 2 % of sales | 2 % of sales |
Cash Sales | 10 millions | 10 millions | 10 millions |
Should company change the credit term or not
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