Question
FFF has credit sales of $740,000 yearly with credit terms of net 60 days, with an average collection period of 75 days. Lipto does not
FFF has credit sales of $740,000 yearly with credit terms of net 60 days, with an average collection period of 75 days. Lipto does not offer a discount for early payment. (Use 365 days in a year.)
d-1. Assume the new trade terms of 3/10, net 30 will increase sales by 12 percent because the discount makes Lipto price competitive. If Lipto earns 19 percent on sales before discounts, calculate the net change income. (Do not round intermediate calculations. Round the final answer to nearest whole dollar.)
Net change income?
Please show the workings in details.
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