Question no. 1: McDowell Industries sells on terms of 4/10, net 40. Total sales for the year are $825,500. Thirty percent of customers pay on the 15th day and take discounts; the other 70% pay, on average, 60 days after their purchases. What is the days sales outstanding? What is the average amount of receivables? What would happen to average receivables if McDowell toughened its collection policy with the result that all non-discount customers paid on the 40th day?
Question no. 1:
McDowell Industries sells on terms of 4/10, net 40. Total sales for the year are $825,500. Thirty percent of customers pay on the 15th day and take discounts; the other 70% pay, on average, 60 days after their purchases.
- What is the days sales outstanding?
- What is the average amount of receivables?
- What would happen to average receivables if McDowell toughened its collection policy with the result that all non-discount customers paid on the 40th day?
Question no.2:
International Industries sells on terms of 3/10, net 50. Gross sales last year were 5,662,500 and
Question no.3:
The D.J. Masson Corporation needs to raise 500,000 for 1 year to supply
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