The SUMBER PROFIT store sells its merchandise in cash, the purchase price per unit of the merchandise is IDR 8,000 and is sold at IDR 9,500 per unit. Sales per year can reach 100,000 units. The company plans to sell on credit with terms of sale of 2/10;n/50. With the credit policy, sales are expected to reach 120,000 units. From these sales it is estimated that the buyer will take advantage of the 50% discount and result in an average collection time of 30 days. 20% capital charge. 

Questions: 

1. How much funds are needed to finance receivables.

2. What is the additional profit when switching to credit sales. 

3. How much it costs with credit sales. Should the company switch to credit sales? Give a conclusion.

Answer rating: 100% (QA)

To answer the questions lets break down the calculations step by step Given data Purchase price per unit IDR 8000 Selling price per unit cash sales ID... View the full answer