What would be the average collection period » Full Grade
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Assignment ID: FG133136921
Question – XYZ Corporation has a 10% opportunity cost of funds. The firm has annual sales of $30 million a year, which are 80% on credit and spread evenly over the year. The average collection period is currently 60 days. XYZ is considering to offer terms of “2/10, net 60”. What would be the average collection period, if 70% of its credit sales customers will take the discount?