McDowell Industries sells on terms of 3/10, net 30. Total sales for the year are $1,086,000; 40% of the customers pay on the 10th day and take discounts, while the other 60% pay, on average, 56 days after their purchases. 1. What is the days' sales outstanding? 2. What is the average amount of receivables? 3. What is the percentage cost of trade credit to customers who take the discount? 4. What is the percentage cost of trade credit to customers who do not take the discount and pay on Day 56?

McDowell Industries sells on terms of 3/10, net 30. Total sales for the year are $1,086,000; 40% of the customers pay on the 10th day and take discounts, while the other 60% pay, on average, 56 days after their purchases. 1. What is the days' sales outstanding? 2. What is the average amount of receivables? 3. What is the percentage cost of trade credit to customers who take the discount? 4. What is the percentage cost of trade credit to customers who do not take the discount and pay on Day 56?

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter21: Supply Chains And Working Capital Management

Section: Chapter Questions

Problem 9P: Grunewald Industries sells on terms of 2/10, net 40. Gross sales last year were 4,562,500 and...

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