Assume that sales are not affected by the tighter credit

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Weir Incorporated has sales of $210,000 and accounts receivable of $19,000. You can easily show that its DSO is well over the industry average of 27 days. Suppose that it speeds up collection, matches the industry average, and manages to earn 8% interest on the cash not tied up in receivables. What would be the savings per year? Assume that sales are not affected by the tighter credit.

Reference no: EM131449190

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