Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

McEwan Industries seils on terms of 3/10, net 40 . Total sales for the year are $661,500;40% of the customers pay on the 10th day

image text in transcribed
image text in transcribed
McEwan Industries seils on terms of 3/10, net 40 . Total sales for the year are $661,500;40% of the customers pay on the 10th day and take disceunts, while the other 60% pay, on average, 66 days after their purchases. Assume 365 days in year for your caiculations. The data has been coliected in the Microsoft Excel Oniine file below. Open the spreadsheet and perform the required analysis to answer the questions below. Open spresdsheet a. What is the days sales outstanding? Round your answer to two decimal places. days b. What is the average amount of receivabies? Round your answer to the nearent cent. Do not round intermediate caiculations. 4 c. What is the percentage cost of trade credit to custerners who take the discount? Round your answers to two decimal places. d. What is the percentage cost of trade credit to customers who do not take the discount and pay in 66 days? Round your answers to fwo Gecimal. places. Do not round intertediate calculations. Nominal cost Effective cost E. What would happen to McEwan's accounts receivable if it toughened up on its collection policy with the result that all noadisceunt customers pald on the 40 th day? Round your answers to two decimal places. Do not round intermediate calculations. DSC= days Average receivables =1

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

More Books

Students also viewed these Finance questions

Question

What type of organizations help a project manager?

Answered: 1 week ago