Question
A company plans to tighten its credit policy. The new policy will decrease the average number of days in collection from 75 to 50 days
A company plans to tighten its credit policy. The new policy will decrease the average number of days in collection from 75 to 50 days and will reduce the ratio of credit sales to total revenue from 70% to 60%. The company estimates that projected sales will be 5% less if the proposed new credit policy is implemented. If projected sales for the coming year are $50 million, calculate the dollar impact on accounts receivable of this proposed change in credit policy. Assume a 360-day year.
$6,500,000 decrease.
$3,819,445 decrease.
$3,333,334 decrease.
$18,749,778 increase.
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Introductory Financial Accounting for Business
Authors: Thomas Edmonds, Christopher Edmonds
1st edition
1260299449, 978-1260299441
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