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Unformatted text preview: 4. Collection policy Our text does not make mention of how competition sets the credit policy. It says it is a controllable determinant and is set by either the credit manager or the executive committee. Problem Answer Receivables = DSO x Annual Daily Sales =17 x 3500 = $59,500 Problem Answer Nom ann cost = (discount / 100-discount) x (365/Days credit outstanding – discount days) = .0309 x 24.33 = 75.26% EAR = (1 = .0309) 24.33 -1 = 109.8%...
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- Spring '10
- credit manager, Nom ann cost, Credit policy elements, Annual Daily Sales