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Home / Questions / Plust Company&39s projected sales for the coming year are $40000000 of which 70% are expec...

Plust Company&39s projected sales for the coming year are $40000000 of which 70% are expected to be credit sales at terms of n40 Plust predicts that a proposed relaxation of credit standards

Plust Company's projected sales for the coming year are $40,000,000, of which 70% are expected to be credit sales at terms of n/40. Plust predicts that a proposed relaxation of credit standards will increase credit sales by 20% and raise the average collection period from 30 days to 35 days. Based on a 360-day year, how much Plust's average account receivable balance will increase by the proposed new credit policy?   Hint: Find the average balance in Receivables under current credit policy and proposed credit policy.

 

May 18 2020 View more View Less

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