Fin 370 week 3 - receive no discount. (c) Net 30 means the...

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1 Running head: WORKING CAPITAL MANAGEMENT ACTIVITY Working Capital Management Activity Holly Hyatt, Jerrin Mathews, Christopher Lowe, Billy Harper, Joseph Desimone University of Phoenix
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2 FIN 370 Niki Silver 08/21/2011
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3 WORKING CAPITAL MANAGEMENT ACTIVITY Working Capital Management Activity Our paper will cover the optimal credit and collection policies on chapter 20. We will solve questions 20-6A. Problems 20-2. (a) 1/20 net 50 means a customer would receive a 1 percent discount if the account is paid within 20 days; otherwise, it can be paid within 50 days and they would receive no discount. (b) 2/30 net 60 means a customer could receive a 2 percent discount if the account is paid within 30 days; otherwise, it must be paid within 60 days and they would
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Unformatted text preview: receive no discount. (c) Net 30 means the customer is offered no discounts and the account must be paid within 30 days. (d) 2/10, 1/30 net 60 means a two percent discount can be offered and accepted if the account is paid within 10 days, if it is paid after 10 days but before and up to 30 days, a one percent discount is offered to the customer; otherwise, the account must be paid within 60 days with no additional discount offered. 4 5 WORKING CAPITAL MANAGEMENT ACTIVITY References Arthur Keown, John Martin, J. Petty, David Scott, (2005). Financial Management: Principles and Applications (10th ed.). : Prentice Hall....
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Fin 370 week 3 - receive no discount. (c) Net 30 means the...

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