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Newtown Co. has a very attractive credit policy, and none of its customers pays in cash when the firm makes a sale. Newtown Co. sells
Newtown Co. has a very attractive credit policy, and none of its customers pays in cash when the firm makes a sale. Newtown Co. sells to its customers on credit terms of 1/10, net 30. If a customer bought $100,000 worth of goods and paid the firm cash eight days after the sale, how much cash would Newtown Co. get from the customer? $99,000 $105,000 $100,000 $87,500 If the customer paid off the account after 15 days, Newtown Co. would receive . Approximately 40% of Newtown Co.'s customers take advantage of the discount and pay on the 10th day. The remaining 60% take an average of 35 days to pay off their accounts. What is Newtown Co.'s days sales outstanding (DSO), or the average collection period? 28.75 days 20.00 days 26.25 days 25.00 days
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