The implied reduced financing cost of the receivables

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Suppose that last year a firm had a DSO of 35 days and annual revenues equal to 10,000,000$. The treasury department has made it a goal to reduce the DSO to 30 days, while holding constant revenues. If this reduction is realized, then calculate the following:

The implied reduced financing cost of the receivables (Assume a borrowing rate of 2.5%)

Reference no: EM131308376

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