Problem 7-28

Lipto Biomedic 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.)

I need help finding the answer with the worked out solution for c-1 and d-1. thank you!

New receivable balance 20274 C-1. If Lipto reduces its bank loans, which cost 8 percent, by the cash generated from reduced receivables, what will be the net gain or loss to the firm? (Do not round intermediate calculations. Round the final answer to nearest whole dollar. Negative answers should be indicated by a minus sign.) Net change c-2. Should Lipto Biomedic offer the discount? Yes No 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 d-2. Should Lipto Biomedic offer the discount? Yes