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% of the customers pay on the tenth day and take discounts, 40% pay on the thiritieth day and the remaining 30% pay,on avg,40 days after the purchase.
a. what is the firm's avg 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% annually. how much would the toughened credit policy save the firm in annual receivables carrying expense?This question 16.5 a –d needs to show how answers were calculated. Also I need the below listed memo assignment completed that is based on the calculations listed above.