The credit policy of Spurling Products is “1.5/10, net 35.” At present 30% of the customers take the discount, 62% pay within the net period, and the rest payment within 45 days of invoice. What would receivables be if all customers took the cash discount?
A. Lower than the present level.
B. No change from the present level.
C. Higher than the present level.
D. Unable to determine without more information.
Answer:A
The credit policy of Spurling Products is “1.5/10, net 35.” At present 30% of the customers take the discount, 62% pay within the net period, and the rest payment within 45 days of invoice. What would receivables be if all customers took the cash discount?
A. Lower than the present level. B. No change from the present level. C. Higher than the present level. D. Unable to determine without more information.