QUESTION 13 A company has annual credit sales of 10 million, and a cost of capital...
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QUESTION 13 A company has annual credit sales of 10 million, and a cost of capital of 7%. At present the company's debtors take on average 45 days to pay for goods bought on credit. The company is considering a discount scheme which it estimates would reduce the period taken by customers to 25 days. Based on the limited information above, what would be the net effect of the proposed discount scheme on the company's profit and loss in a given year? Assume 360 days in a year. Saving of 48,611 Saving of 38,889 Saving of 1,000 Saving of 555,556 QUESTION 14 A firm's cash cycle is the period of time that elapses between: Sale of goods to customers and receipt of payment from customers Payment to suppliers of raw materials and payment from customers Purchase of raw materials and sale of goods to customers h O Purchase of raw materials from suppliers and payment from customers QUESTION 13 A company has annual credit sales of 10 million, and a cost of capital of 7%. At present the company's debtors take on average 45 days to pay for goods bought on credit. The company is considering a discount scheme which it estimates would reduce the period taken by customers to 25 days. Based on the limited information above, what would be the net effect of the proposed discount scheme on the company's profit and loss in a given year? Assume 360 days in a year. Saving of 48,611 Saving of 38,889 Saving of 1,000 Saving of 555,556 QUESTION 14 A firm's cash cycle is the period of time that elapses between: Sale of goods to customers and receipt of payment from customers Payment to suppliers of raw materials and payment from customers Purchase of raw materials and sale of goods to customers h O Purchase of raw materials from suppliers and payment from customers
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Question 13 To calculate the net effect of the proposed discount scheme on the companys profit and l... View the full answer
Related Book For
Corporate Finance and Investment decisions and strategies
ISBN: 978-1292064062
8th edition
Authors: Richard Pike, Bill Neale, Philip Linsley
Posted Date:
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