Snider Industries sells on terms of 2/10, net 45. Total sales for the year are $1,500,000. Thirty

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Snider Industries sells on terms of 2/10, net 45. Total sales for the year are $1,500,000. Thirty percent of customers pay on the 10th day and take discounts; the other 70% pay, on average, 50 days after their purchases.
a. What is the days sales outstanding?
b. What is the average amount of receivables?
c. What would happen to average receivables if Snider toughened its collection policy with the result that all nondiscount customers paid on the 45th day?
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Intermediate Financial Management

ISBN: 978-1285850030

12th edition

Authors: Eugene F. Brigham, Phillip R. Daves

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