Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. finance
  3. pinkertons has credit sales of $550,000 yearly wit

Pinkertons has credit sales of $550,000 yearly with customers paying on average in 65 days....

80.2K

Verified Solution

Question

Finance

image

Pinkertons has credit sales of $550,000 yearly with customers paying on average in 65 days. Pinkertons does not currently offer a discount for early payment. Required: 1. What is the average receivables balance? 2. Assume Pinkertons offers new trade terms of 1/10, Net 30. All customers take the discount and pay in 10 days, and sales increase by 12 percent as a result of this discount incentive. If Pinkertons earns 25 percent on sales (before discounts) and can reduce their 2% bank loan due to the early payments, should they offer these new discount terms? Support your answer with all relevant calculations

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Q

when using magnetic beads to separate labeled cells, what is the difference between positive and negative...

Biology
Q

SUMMARY OF DNA-RELATED CHANGES DURING MITOSIS & MEIOSIS (fill in the blanks with the correct number) -------------------------------------------------Meiosis I...

Biology
Q

Measures of liquidity, Solvency, and Profitability The comparative financial statements of Marshall Inc. are as follows. The...

Accounting
Q

Without redox reactions NADH cannot unload its electrons and the process of will be shut...

Biology
Q

The graph of a function fis given Estimate 0 1 0 10 f x dx...

Calculus
Q

Q2 AL1.2018. Crit Catalan reported the long shadow 1.200,000 Shareholders' Equity...

Accounting
Q

Exercise 7-4 Direct Labor Budget [LO7-5] The production...

Accounting
Q

Current Attempt in Progress Included in Whispering Company's December 31,2025, trial balance are...

Accounting
Q

Pearl Corp. is expected to have an EBIT of $2,500,000 next year. Depreciation, the increase...

Accounting
Q

White Inc. will be acquiring Clear Co. which provides a return on equity of 15%,...

Accounting
Q

Task (B) Merchandising Activities (24 points) Korab Nutrition sold merchandise for $2,500 which cost them...

Accounting
Q

2 Check my work Hillyard Company, an office supplies specialty store, prenares its master budget...

Accounting