Receivables Investment Snider Industries sells on terms of 3/10, net 25. Total sales for the year are $530,000. Thirty percent of customers pay on the 10th day and take discounts; the other 70% pay, on average, 30 days after their purchases. Assume 365 days in year for your calculations. What is the days sales outstanding? Round your answer to one decimal place. days What is the average amount of receivables? Round your answer to the nearest dollar. Do not round intermediate calculations. $ What would happen to average receivables if Snider toughened its collection policy with the result that all nondiscount customers paid on the 25th day? Round your answer to the nearest dollar. Do not round intermediate calculations. $
If a firm buys under terms of 3/15, net 40, but actually pays on the 20th day and still takes the discount, what is the nominal cost of its nonfree trade credit? Assume 365 days in year for your calculations. Do not round intermediate calculations. Round your answer to two decimal places.
%
Does it receive more or less credit than it would if it paid within 15 days?
I. Paying before the discount period and taking the discount gives the firm more credit than it would receive if it paid within 15 days.
II. Paying after the discount period, but still taking the discount gives the firm more credit than it would receive if it paid within 15 days.
III. Paying after the discount period, but still taking the discount gives the firm less credit than it would receive if it paid within 15 days.