Cost of trade credit to customers who take discount

Assignment Help Financial Management

Reference no: EM131902611

McEwan Industries sells on terms of 3/10, net 30. Total sales for the year are $1,175,000; 40% of the customers pay on the 10th day and take discounts, while the other 60% pay, on average, 58 days after their purchases. Assume 365 days in year for your calculations.

What is the days sales outstanding? Round your answer to two decimal places.............. days

What is the average amount of receivables? Round your answer to the nearest cent. Do not round intermediate calculations............ $

What is the percentage cost of trade credit to customers who take the discount? Round your answers to two decimal places......... %

What is the percentage cost of trade credit to customers who do not take the discount and pay in 58 days? Round your answers to two decimal places. Do not round intermediate calculations.

Nominal cost:...... %

Effective cost:.......... %

What would happen to McEwan’s accounts receivable if it toughened up on its collection policy with the result that all nondiscount customers paid on the 30th day? Round your answers to two decimal places. Do not round intermediate calculations. Days sales outstanding (DSO) = ...........days

Average receivables =.......... $

Reference no: EM131902611

Questions Cloud

What is the inflation seen over that time : If the CPI in year 2000 was 124 and the CPI in year 2015 was 198, what is the inflation seen over that time? What is the annual average inflation?

What is the question that the case is asking : FACTS: Pick out the relevant facts. Tell what happened. This should be about four sentences. Who? What? Where? When?

What is the future worth cost of the machinery : IPS Corp. will upgrade its package-labeling machinery. What is the future worth cost of the machinery?

Why do patient people have low discount rates : Why do patient people have low discount rates and impatient people have high discount rates?

Cost of trade credit to customers who take discount : What is the days sales outstanding? What is the percentage cost of trade credit to customers who take the discount?

What kind of challenges do juveniles with special needs face : How was hope used to transform the lives of the juveniles in the video? What happens when hope is challenged?

Consumption-investment-government consumption : Calculate the consumption, the investment, the government consumption, and the private savings.

Proposal to limit the amount of money doctors : Assume that a politician introduces a proposal to limit the amount of money doctors can earn.

Discuss things such as the organization of melody and rhythm : discuss things such as the organization of melody and rhythm, or sections and form, or interactions and relationships between two or more instruments.

User Account

All Pages