A firm is considering relaxing its credit standards which will result in annual sales increasing from $1.50
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A firm is considering relaxing its credit standards which will result in annual sales increasing from $1.50 million to $2.12 million. Costs of goods sold represent 53 percent of sales and the average collection period is expected to increase from 33 to 51 days. If the firm requires a return of 9.9 percent, what the cost of investing in the extra accounts receivables from the planned relaxation of credit standards?
Related Book For
Principles of Managerial Finance
ISBN: 978-1408271582
Arab World Edition
Authors: Lawrence J. Gitman, Chad J. Zutter, Wajeeh Elali, Amer Al Roubaix
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