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Size of accounts receivable

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A company sells 4,500 units of its perfume collection each year at a price per unit of $400. All sales are on credit with terms of 2/10 net 40. The discount is taken by 60 percent of the customers. What is the amount of the company's accounts receivable? In reactions to sales by its main competitor is considering a change in its credit policy to terms of 4/10, net 30 to preserve its market share. How will this change in policy affect accounts receivable?

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Solution Summary

The size of account receivables are examined. The policy affect accounts receivable is determined.

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Sales Revenue per day =4500*400/365=$4931.51
60% of the customers will avail the discount and will pay on the 10th day. Thus, credit ...

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