KXP Co

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April 29, 2019 at 11:16 pm #514545
Momo
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Hey there,after seeing your lecture on “Receivables Mgt-Change of policy”,I attempted KXP Co using your approach.And for the revised Receivables I got (41/365 days)*15,000,000=1,684,932.With the current Receivables being 2466000.I got a fall in receivables 781068 and Interest saved of 46,864(781068*6%) and Discount(cost)=75000 and a Net Cost of 28136.
However,I see the exam solution is so different and they got an interest saved of 48,097 and Discount(cost)=75000.And Net cost of 26903.
There is a difference of 1233 between my answer and what i saw as the solution.
I would like to know if I was on the right path or not and if I wasn’t kindly help me out here on where I might have gone wrong.
Thanks.
Mat
April 30, 2019 at 3:58 am #514560
John Moffat
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The difference is minimal and due to rounding.
Nobody would be worried about so small a difference in practice, and you would certainly not lose any marks in the exam.
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