What are the effective annual costs for the two proposed credit policy alternatives? Ifthe average borrowing rate for the company's customers is 15%, will these credit policies be attractive to these customers?

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1 es Results > Alternative #1: 2/20 net 30 Lose 5% sales 50% of customers will pay at Day 20 40% of customers will pay at Day 30 10% of customers will pay at Day 60 Cash, inventory, fixed assets, accounts payable, long-term debt, and equity will remain unchanged hat you were looking for. FNCE 371v5 ok for something else? vords CX English (Canada) Accessibility: Investigate Assignment 1, Case 3 of 3 October 2019 Alternative #2: 2/25 net 45 No lost sales 60% of customers will pay at Day 25 35% of customers will pay at Day 45 5% customers will pay at Day 60 Cash, inventory, fixed assets, accounts payable, long-term debt, and equity will remain unchanged Industry average: 2/20 net 30 Average collection period Net profit margin = 5% Return on assets = 5.2% Return on equity = 13% = 28 days DFocus + 100% CNC 10:45 DM 1 es Results > Alternative #1: 2/20 net 30 Lose 5% sales 50% of customers will pay at Day 20 40% of customers will pay at Day 30 10% of customers will pay at Day 60 Cash, inventory, fixed assets, accounts payable, long-term debt, and equity will remain unchanged hat you were looking for. FNCE 371v5 ok for something else? vords CX English (Canada) Accessibility: Investigate Assignment 1, Case 3 of 3 October 2019 Alternative #2: 2/25 net 45 No lost sales 60% of customers will pay at Day 25 35% of customers will pay at Day 45 5% customers will pay at Day 60 Cash, inventory, fixed assets, accounts payable, long-term debt, and equity will remain unchanged Industry average: 2/20 net 30 Average collection period Net profit margin = 5% Return on assets = 5.2% Return on equity = 13% = 28 days DFocus + 100% CNC 10:45 DM