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Home / Questions / Aziz Industries has sales of $100,000 and accounts receivable of $11,500, and it gives its...

Aziz Industries has sales of $100,000 and accounts receivable of $11,500, and it gives its customers 30 days to pay. The industry average DSO is 27 days, based on a 365-day year. If the company change

Aziz Industries has sales of $100,000 and accounts receivable of $11,500, and it gives its customers 30 days to pay. The industry average DSO is 27 days, based on a 365-day year. If the company changes its credit and collection policy sufficiently to cause its DSO to fall to the industry average, and if it earns 8.0% on any cash freed-up by this change, how would that affect its net income, assuming other things are held constant?

  a.

$296.22

  b.

$267.34

  c.

$328.22

  d.

$311.81

  e.

$281.41

May 11 2021 View more View Less

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