Collection period is required to approve cash discount? plan

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Reference no: EM131545556

?Klein's Tools is considering offering a cash discount to speed up the collection of accounts receivable. Currently the firm has an average collection period of 64 days, annual sales are 31,000?units, the? per-unit price is $36, and the? per-unit variable cost is $26. A 11?% cash discount is being considered. ? Klein's Tools estimates that 85?% of its customers will take the 11?% discount. If sales are expected to rise to 33,000 units per year and the firm has a 17?% required rate of? return, what minimum average collection period is required to approve the cash discount? plan?

Reference no: EM131545556

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