What are the days sales outstanding

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Reference no: EM13849801

Receivables investment

McDowell Industries sells on terms of 3/10, net 30. Total sales for the year are $1,086,000; 40% of the customers pay on the 10th day and take discounts, while the other 60% pay, on average, 56 days after their purchases. Assume 365 days in year for your calculations.

1. What are the days’ sales outstanding? Round your answer to two decimal places.

in days ?

2. What is the average amount of receivables? Round your answer to the nearest cent. $

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

4. What is the percentage cost of trade credit to customers who do not take the discount and pay on Day 56? Round your answers to two decimal places.

Nominal cost: %

Effective cost: %

Reference no: EM13849801

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