Question: Details Present Plan Plan A Plan B Credit term 2/10 n /30 2/10 n/ 40 2/10 n / 60 sales 75 millions 5% 7 %
Details | Present Plan | Plan A | Plan B |
Credit term | 2/10 n /30 | 2/10 n/ 40 | 2/10 n / 60 |
sales | 75 millions | 5% | 7% |
Amount received in discount period | 25% | 25% | 25% |
Investment cost | 10 % of receivables | 10 % of change in receivables | 10 % of sales receivables |
Profit rate | 25 % of sales | 25 % of sales | 25 % of sales |
Bad debts cost | 2 % of sales | 2 % of sales | 2 % of sales |
Cash Sales | 10 millions | 10 millions | 10 millions |
Should company change the credit term or not
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