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management of working capital( Accounts receivables) _ Example 2

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FM Exams › management of working capital( Accounts receivables) _ Example 2

  • This topic has 1 reply, 2 voices, and was last updated 10 months ago by LMR1006.
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  • November 17, 2024 at 11:10 pm #713304
    devashishlodha
    Participant
    • Topics: 2
    • Replies: 0
    • ☆

    In example 1, we calculated effective disc and converted it in 12 months rate.
    But in example 2 , we are calculating disc as cost and not converting it to 12 months effective rate. Then how is is a per annum cost sir?

    November 18, 2024 at 7:27 am #713315
    LMR1006
    Keymaster
    • Topics: 4
    • Replies: 1578
    • ☆☆☆☆☆

    The second example clearly states what is the net cost or benefit of the change in policy?
    Not an effective % cost as per example 1

    It’s asking for something completely different
    Is the discount worth doing
    Why do you think it’s a cost per annum?

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