Question: Your company s largest supplier has just notified you that it

Your company’s largest supplier has just notified you that it is changing its credit and payment terms. Previously, its standard terms were “n/30” and the company had no electronic payment option. Under its new policy, all customers (including your company) will have terms “2/10; n/30” and all payments must be by electronic funds transfer.
Required:
Explain the effect that these changes should have on your company’s accounts payable turnover ratio and average payment period. Be sure your answer provides sufficient rationale for your position.


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  • CreatedJune 11, 2015
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