Receivables Investment
Snider Industries sells on terms of 3/10, net 40. Total sales for the year are $1,510,500. Thirty percent of the customers pay on the 10th day and take discounts; the other 70% pay, on average, 58 days after their purchases. Assume 365 days in year for your calculations.
What is the days sales outstanding? ___ days
What is the average amount of receivables?___$
What would happen to average receivables if Snider toughened up on its collection policy with the result that all nondiscount customers paid on the 40th day?___$