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Question 4 ABC Ltd asks its credit customers to pay by the end of the month after the month of delivery R15000000 per year and
Question 4 ABC Ltd asks its credit customers to pay by the end of the month after the month of delivery R15000000 per year and bad debts to R500000 per year. It is planned to offer customers a cash this facility but that the rest will still only pay at 70 days after-sales. At present, the company has a reduced to R300 000 per year and saving in credit management of R150000 per year It is also determined that the Reduction in Trade Receivables is R821917 80 Should KBC offer the new credit terms to customers? R R Cost of discount Less Interest saved on reduction in Trade Receivables Administration cost saving Cost of bad debts saved Net cost of the policy decision State if the policy is a GOOD or BAD decision Question 4 ABC Ltd asks its credit customers to pay by the end of the month after the month of delivery R15000000 per year and bad debts to R500000 per year. It is planned to offer customers a cash this facility but that the rest will still only pay at 70 days after-sales. At present, the company has a reduced to R300 000 per year and saving in credit management of R150000 per year It is also determined that the Reduction in Trade Receivables is R821917 80 Should KBC offer the new credit terms to customers? R R Cost of discount Less Interest saved on reduction in Trade Receivables Administration cost saving Cost of bad debts saved Net cost of the policy decision State if the policy is a GOOD or BAD decision
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