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    Aziz Industries: If the company changes its credit and collection policy sufficiently to cause its DSO to fall to the industry average, and if it earns 8.0% on any cash freed-up by this change, how would that affect its net income, assuming other things are held constant?

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    Aziz Industries has sales of $100,000 and accounts receivable of $11,500, and it gives its customers 30 days to pay. The industry average DSO is 27 days, based on a 365-day year. If the company changes its credit and collection policy sufficiently to cause its DSO to fall to the industry average, and if it earns 8.0% on any cash freed-up by this change, how would that affect its net income, assuming other things are held constant?

    A. $267.34
    B. $281.41
    C. $296.22
    D. $311.81
    E. $328.22

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    https://brainmass.com/business/credit-management-credit-policy-analysis-and-risk/136098

    Solution Summary

    Rational and computations given.

    $2.49

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