Fnd firms new receivables balance if milwaukee surgical

Reference no: EM13390873

Milwaukee surgical supplies, Inc., sells on terms of 3/10, net 30. Gross sales for the year are $1,200,000, and the collections department estimates that 30 percent of the customers pay on the tenth day and take discounts, 40 percent pay on the thirtieth day and the remaining 30 percent pay, on average, 40 days after the purchase (Assume 360 days per year.)

(a) What is the firm's average collection period?

(b) What is the firm's current receivables balance?

(c) What would be the firm's new receivables balance if Milwaukee Surgical toughened up on its collection policy with the result that all nondiscount customers paid on the 30th day?

(d) Suppose that the firm's cost of carrying receivables was 8 percent annually. How much would the toughened credit policy save the firm in annual receivables carrying expense? (Assume that the entire amount of receivables had to be financed.)

Reference no: EM13390873

Questions Cloud

Describe the advantages and disadvantages associated with : 1. discuss the advantages and disadvantages associated with the decision to implement the new system using the big bang

Write down the effects of government intervention in cell : there are 2 brands of cell phones that are almost identical except for some minor features the a-phone and the

Sketch the activity-on-arrow network diagrams for the given : draw the activity-on-arrow network diagrams for the following pert problem. use the minimum number of necessary dummy

Youve just been notified by your firms managing principal : you have just been notified by your firms managing principal that another financial planner has decided to leave the

Fnd firms new receivables balance if milwaukee surgical : milwaukee surgical supplies inc. sells on terms of 310 net 30. gross sales for the year are 1200000 and the collections

The lead time to get powder x from a supplier in 9 days : 1.the injection molding department of alvec inc. uses 40 pounds powder x a day. the plant operates 250 days per year.

The following information relates to harris : the following information relates to harris corporation.accountcurrent yearprior yearnet sales all

Find the amount of free trade credit that langley obtains : langley clinics inc. buys 400000 in medical supplies each year at gross prices from its major suppliers consolidated

Future value calculation without referring to the : 1.future value calculation without referring to the preprogrammed function on your financial calculator use the basic

User Account

All Pages