Piedmont Industries sells on terms of 2/10 net 30. Total sales for the year are $1.5 million. Thirty percent of customers pay on the 10th day and take discounts; the other 70% pay, on average, 60 days after their purchases. What would happen to average receivables if Piedmont toughened its collection policy with the result that all non-discount customers paid on the 40th day?
Piedmont Industries sells on terms of 2/10 net 30. Total sales for the year are $1.5 million. Thirty percent of customers pay on the 10th day and take discounts; the other 70% pay, on average, 60 days after their purchases. What would happen to average receivables if Piedmont toughened its collection policy with the result that all non-discount customers paid on the 40th day?
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
Related questions
Question
Piedmont Industries sells on terms of 2/10 net 30. Total sales for the year are $1.5 million. Thirty percent of customers pay on the 10th day and take discounts; the other 70% pay, on average, 60 days after their purchases. What would happen to average receivables if Piedmont toughened its collection policy with the result that all non-discount customers paid on the 40th day?
AI-Generated Solution
AI-generated content may present inaccurate or offensive content that does not represent bartleby’s views.
Unlock instant AI solutions
Tap the button
to generate a solution
Recommended textbooks for you
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
Foundations Of Finance
Finance
ISBN:
9780134897264
Author:
KEOWN, Arthur J., Martin, John D., PETTY, J. William
Publisher:
Pearson,
Fundamentals of Financial Management (MindTap Cou…
Finance
ISBN:
9781337395250
Author:
Eugene F. Brigham, Joel F. Houston
Publisher:
Cengage Learning
Corporate Finance (The Mcgraw-hill/Irwin Series i…
Finance
ISBN:
9780077861759
Author:
Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor
Publisher:
McGraw-Hill Education