Credit Management) 2090 Credit Policy Evaluation The Johnson Company sells 3,000 pairs of running shoes...
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Credit Management) 2090 Credit Policy Evaluation The Johnson Company sells 3,000 pairs of running shoes per month at a cash price of $90 per pair. The firm is considering a new policy that involves 30 days' credit and an increase in price to $91.84 per pair on credit sales. The cash price will remain at $90, and the new policy is not expected to affect the quantity sold. The discount period will be 10 days. The required return is 1 percent per month. a. How would the new credit terms be quoted? b. What is the investment in receivables required under the new policy? c. Make a recommendation to Johnson Company
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