A firm offers its customers credit terms of 2/10, net 30. Its total annual credit sales...
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A firm offers its customers credit terms of 2/10, net 30. Its total annual credit sales are €10m, 60% of which is repaid early so as to avail of the discount. Customers who avail of the discount take 10 days to pay and there are no bad debts associated with them. Customers who do not avail of the discount take 30 days to pay, but the bad debt loss ratio associated with them is 4% of sales. The firm's average trade receivables is? A firm offers its customers credit terms of 2/10, net 30. Its total annual credit sales are €10m, 60% of which is repaid early so as to avail of the discount. Customers who avail of the discount take 10 days to pay and there are no bad debts associated with them. Customers who do not avail of the discount take 30 days to pay, but the bad debt loss ratio associated with them is 4% of sales. The firm's average trade receivables is?
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To calculate the firms average trade receivables we need to consider the credit sales and the repaym... View the full answer
Related Book For
Intermediate Financial Management
ISBN: 978-1111530266
11th edition
Authors: Eugene F. Brigham, Phillip R. Daves
Posted Date:
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