What is the firm average collection period

Assignment Help Business Management
Reference no: EM131170948

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 percent of the customers pay on the tenth day and take discounts, 40 percent pay on the thirtieth day, and the remaining 30 percent pay, on average, 40 days after the purchase. (Assume 360 days per year)

a. What is the firm's average 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 non-discount customers paid on the 30th day?

d. Suppose that the firm's cost of carrying receivables was 8 percent annually. How much would the toughened credit policy save the firm in annual receivables carrying expense? (Assume that the entire amount of receivables had to be financed.)

Thank you for the taking time looking into this problem

Reference no: EM131170948

Questions Cloud

Compare and contrast the keynesian portion of ad : The AD/AS model describes changes in the economy by relating real GDP (output) and the price level. A. Compare and contrast the Keynesian portion of the AD/AS model with the classical portion of theAD/AS model, and explain how the level of product..
Evaluate the positive benefits and negative aspects : 1. Evaluate the positive benefits and negative aspects, respectively, of HMO managed care from the provider's point of view-i.e., a physician and a healthcare facility-and from a patient's point of view. Provide a rationale for your response.
Determine three roles that interest groups play in america : Determine three roles that interest groups play in American politics in terms of impacting election outcomes.
Determine how much information a firm is obliged : From an ethical perspective, determine how much information a firm is obliged to tell a potential strategic alliance partner about what it expects to learn from the cooperative arrangement. Explain your rationale
What is the firm average collection period : a. What is the firm's average 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 non-disco..
What is the shortening d of the bar : A circular tube of length L = 0.5 m is loaded in compression forces P (see figure). The outside and inside diameters are 30 mm and 25 mm, respectively.
Find market clearing price and quantity in the market : Find the market clearing price and quantity in the market for TVs if market demand is given by P=7,000-20Qd and Supply is given by, P=1000+10Qs?
The newly privatized entities often have little incentive : The newly privatized entities often have little incentive to restructure their operations to become more efficient when _____.
Describe the ways in which different levels of government : In an introductory paragraph, describe the ways in which different levels of government interrelate. What solution are the different governments trying to achieve?

Reviews

Write a Review

 

Business Management Questions & Answers

  Pair of diamond earrings

Amanda is an employee at a high end department store in the HR department and has been in her office all day. After a pair of diamond earrings are found missing from the jewelry department, Mike, the store manager has every employee in the store b..

  Notions of mathematical differences

Explain the notions of mathematical differences, managerially important differences, and statistical significance. Can results be statistically significant and yet lack managerial importance? Explain your answer.

  Margaret indifference map

How would Margaret's indifference map look like? What is the Marginal Rate of Substitution (MRSA,B) between good A and B? Assume Margaret has an income of $10 and the prices of two goods are $1 each. How much of good A will be purchased?

  Virtual group chartersuggest a formal virtual group charter

virtual group chartersuggest a formal virtual group charter. at a minimum the charter should contain a group name

  Give reason for walmart fail

What do you think that it would take to have WALMART fail?

  Long term caredescribe the behavioral health considerations

long term caredescribe the behavioral health considerations wrapped up in long term care? how have the operations

  Which of the subsequent is correct

The normal price is $150.00 as well as the sale price must have read $135.00 but the advertisement says $15.00.

  How do you think you would feel about accusing a colleague

how do you think you would feel about accusing a colleague of research misconduct?to whom would you speak to in case

  Culture and managementthe firms marketing team has never

culture and managementthe firms marketing team has never before created a marketing plan for potential clients outside

  Benefits of implementing new health information technology

You have been asked by your health care organization to provide a detailed report on the benefits of implementing a new health information technology system to comply with the current mandates.

  Main stakeholders in the mg rover business

Set out the main stakeholders in the MG Rover business at the time of its collapse. How would you determine the relative importance of their stake?

  Elucidate how do you think george brenkert would view

Elucidate how do you think George Brenkert would view the evaluations you constructed for Prahalad also Crisp. Which theorist do you find out the most convincing. Explain why.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd