The Shekhawati Ltd. currently has sales of Rs. 30 Lakh with an average period of 2...

  

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The Shekhawati Ltd. currently has sales of Rs. 30 Lakh with an average period of 2 months. At present, no discount are offered to the customers. The M. D. of the company is thinking to allow a discount of 2% on cash sales which results in (i) The average collection period would reduce to one month. (ii) The company normally requires a 25% return on its investment. (iii) 50% of customers would take advantage of 2% discount. In the above changed situation, the net increase in profit of the company will be The Shekhawati Ltd. currently has sales of Rs. 30 Lakh with an average period of 2 months. At present, no discount are offered to the customers. The M. D. of the company is thinking to allow a discount of 2% on cash sales which results in (i) The average collection period would reduce to one month. (ii) The company normally requires a 25% return on its investment. (iii) 50% of customers would take advantage of 2% discount. In the above changed situation, the net increase in profit of the company will be

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QUESTION The Shekhawati Ltd currently has sales of Rs 30 lakh with an average p... View the full answer