- This topic has 4 replies, 3 voices, and was last updated 4 years ago by
.
- Posts
Hi!
Can u pls help me solve this question. Thank you in advanceIf Hall were to offer customers 1.5% discount for payments within one month, what
would be the annual cost of that in respect of receivables who currently take two
months or three months to pay?2?month receivables 3?month receivables
A 19.89% 9.49%
B 9.49% 4.64%
C 4.64% 9.49%
D 9.49% 19.89%Note- in order to gain the discount customer needs to pay within 1 months
For 2 months receivable –
{(100/100-1.5) ^12/1}-1]*100
19.89%
For 3months receivable –
{(100/100-1.5) ^12/2}-1]*100
9.5%Krishank: Please do not answer in this forum because it is the Ask the Tutor Forum (but please do help people in the other Paper FM forum).
Adi.Irfan: What Krishank has written is correct, but do watch my free lectures on the management of receivables where all this is explained. The lectures are a complete free course for Paper FM and cover everything needed to be able to pass the exam well.
- The topic ‘working capital management’ is closed to new replies.