Average receivables of discount customers


Grunewald Industries sells on terms of 2/10, net 40. Gross sales last year were $4,562,500, and accounts receivable averaged $437,500. Half of Grunewald"s customers paid on the 10th day and took discounts. What are the nominal and effective costs of trade credit to Grunewald"s non discount customers? (Hint: Calculate sales/day based on a 365-day year; then get average receivables of discount customers; then find the DSO for the non discount customers.)

Solution Preview :

Prepared by a verified Expert
Finance Basics: Average receivables of discount customers
Reference No:- TGS0677719

Now Priced at $15 (50% Discount)

Recommended (97%)

Rated (4.9/5)