Compute the amount of freed up funds based on the three different cash discount policies based on the following: Old accounts receivable (given in table 1
Table 1:
Days outstanding Amount
0-10................................$20,000
10-20.............................$150,000
20-30.............................$400,000
30-40.............................$650,000
40-50.............................$430,000
50-60 days.......................$350,000
Total Accounts Receivable..$2,000,000
Table 2:
New terms for cash discounts
Alternative Terms
1 1/10, net 30
2 2/10, net 30
3 3/10, net 30