PT. AAH is currently is selling cooking oil for IDR 15.000/litre. Sales (all on credit) last year were recorded at 2.400.000 unit. Variable cost per unit is IDR 9.000/litre. The firm total fixed cost is IDR. 12.000.000.000. The firm is considering changing its credit policy. Assumption: 1 year = 360 days.
PT. AAH initiate cash discount program, changing its credit terms from net 30 to 4/10 net 30. This change is expected to reduce the average collection
period from 40 days to 25 days. The sales unit is expected to increase 5% from the current level. PT. AAH estimates 85% of its customer will take the discount. The level of
Should PT. AAH change its current account receivable policy?
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