Suppose that last year a firm had a DSO of 35 days and annual revenues equal to 10,000,000$. The treasury department has made it a goal to reduce the DSO to 30 days, while holding constant revenues. If this reduction is realized, then calculate the following:

The implied reduced financing cost of the receivables (Assume a borrowing rate of 2.5%)

 

Transcribed Image Text:

Ethanethiol (C₂H,S) is a compound with a disagreeable odor that is used to impart an odor to natural gas. When ethanethiol is burned, the sulfur reacts with oxygen to form SO₂. What mass of SO₂ forms upon the complete combustion of 28.7 g of ethanethiol? - An iron ore contains 38% Fe₂O3 by mass. What is the maximum mass of iron that can be recovered from 10.0 kg of this ore? Ethanethiol (C₂H,S) is a compound with a disagreeable odor that is used to impart an odor to natural gas. When ethanethiol is burned, the sulfur reacts with oxygen to form SO₂. What mass of SO₂ forms upon the complete combustion of 28.7 g of ethanethiol? - An iron ore contains 38% Fe₂O3 by mass. What is the maximum mass of iron that can be recovered from 10.0 kg of this ore?

Answer rating: 100% (QA)

To calculate the reduced financing cost of the receivables we need to determine the difference in the average accounts receivable balances between the original and reduced DSO Original DSO 35 days Red... View the full answer