Computing average collection period

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Reference no: EM1310180

1) How much money should you pay into the account at the starting of each of 20 years to have $10,000 at the ending of the 20th year? Suppose that account pays 12% per year, and round to nearest $1.

Answer the following questions. When answering questions focus on these 3 items and explain it thoroughly the process: What is it? How does it work and Why does it matter? (What is the impact it has on the manager in the long run) Provide suitable examples of each situation.

i) What do you mean by saying debt is tax-favoured? Determine the benefit to the firm. What are the risks?

ii) What is the benefit to firm or organizing as corporation rather than a partnership?

iii) What is the average collection period (AKA Days Sales Outstanding)? How is it computed? Why is it significant to firm?

Reference no: EM1310180

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