The management of XYZ Co has annual credit sales of $20m and accounts receivable of $4m. Working capital is financed by an overdraft at 12% interest per year. Assume 365 days in a year. What is the annual finance cost saving if the management reduces the collection period by 60 days?

Answer rating: 100% (QA)

Solution To calculate the annual finance cost saving resulting from a reduction in the collection pe... View the full answer