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Essence of Skunk Fragrances, Ltd., sells 6,700 units of its perfume collection each year at a price per unit of $215. All sales are on
Essence of Skunk Fragrances, Ltd., sells 6,700 units of its perfume collection each year at a price per unit of $215. All sales are on credit with terms of 1/10, net 30. The discount is taken by 60 percent of the customers. |
a. | What is the amount of the companys accounts receivable? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) |
b. | In reaction to sales by its main competitor, Sewage Spray, Essence of Skunk is considering a change in its credit policy to terms of 3/10, net 30 to preserve its market share. Will this change in policy increase or decrease accounts receivable? |
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