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    Trade credit and receivables

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    Please help with the following problems. Please provide step by step calculations with explanations.

    A firm offers terms of 2/15,net 30. Currently, two-thirds of all customers take advantage of the trade discount; the remainder pay bills at the due date.

    A. What will be the firm's typical calue for its accounts recievable?

    B. What is the average investment in accounts receivable if annual sales are $20 million?

    C. What would likely happen to the firm's accounts receivable period if it changed its terms to 3/15, net 30?

    See attached 21-7 for further information

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    https://brainmass.com/business/receivables/trade-credit-receivables-25559

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    A firm offers terms of 2/15,net 30. Currently, two thirds of all customers take advantage of the trade discount; the raminder pay bills at the due date.

    A. What will be the firm's typical calue for its accounts recievable?

    2/3 of the receivable account is collected within 15 days, ...

    Solution Summary

    This solution helps with a problem involving trade credit and receivables. Step by step calculations are given for each, along with explanations.

    $2.19