1. Compute the new average collection period based on the terms in Table 2 and the results of the pilot study. Use the simplifying assumption that under the new policies all customers will all pay at the end of the 10th day or the end of the 30th day.
i.e., for the 1/10, net 30
10% * 10 days = 1 day
90% * 30 days = 27 days
28 days average collection period