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Real Companys budgeted sales for the coming year are P50000000 of which 75 are expected to be credit sales at terms of n30 Real estimates that a proposed relaxation of credit standards will

Real Company’s budgeted sales for the coming year are P50,000,000 of which 75% are expected to be credit sales at terms of n/30. Real estimates that a proposed relaxation of credit standards will increase credit sales by 20% and increase the average collection period from 30 days to 40 days. Based on a 360-day year, the proposed relaxation of credit standards will increase average accounts receivable balance by:
A. P1,200,000 C. P1,875,000
B. P3,125,000 D. P5,000,000 

Jun 20 2021 View more View Less

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