$22$

$13$

points

$01-51$:$11$

Maddox Resources has credit sales of $$199\mathrm{.}000$ yearly with credit terms of net $30$ days, which is also the average collection period. Maddox does not offer a discount for early payment, so its customers take the full $30$ days to pay. $($Use $365$ days In a year.$)$ NOTE: For each answer, please show your detalled calculations In your Excel upload flle Into Moodle.

$0-1.$ What is the average receivables balance? $($Do not round Intermedlate colculatlons. Round the final answer to neorest whole dollar.$)$

Accounts receivable balance $,$$ $$

$0-2.$ What is the receivables turnover? $($Round the final answer to $2$ declmal ploces.$)$

Receivables turnover $x$

b$.$ If Maddox offered a $3$ percent discount for payment in $10$ days and every customer took advantage of the new terms, what would the new average receivables balance be$?$ Use the full sales of $$199,000$ for your calculation of receivables. $($Do not round Intermedlate calculatlons. Round the final answer to nearest whole dollar.$)$

New receivable balance

$ $$

c$-1.$ If Maddox reduces its bank loans, which cost $13$ percent, by the cash generated from reduced receivables, what will be the net gain or loss to the firm? Use the full sales of $$199,000$ for your calculation of receivables. $($Negative answers should be Indlcoted by a minus sign. Do not round Intermedlate calculations. Round the final answer to nearest whole dollar. Omit $ sign In your response.$)$

Net Change $ $$

c$-2.$ Should Maddox Resources offer the discount?

Yes

No

d$-1.$ Assume the new trade terms of $\frac{3}{10},$ net $30$ will increase sales by $21$ percent because the discount makes Maddox price competitive. If Maddox earns $15$ percent on sales before discounts, what will be the Net change in income? $($Do not round Intermedlate calculations. Round the final answer to nearest whole dollar.$)$

Net change in income

$ $$

d$-2.$ Should Maddox Resources offer the discount?

Yes

No