Garcia Industries has sales of $200,000 and accounts receivable of $18,500,and it gives its customers 25 days to pay.The industry average DSO is 27 days,based on a 365-day year.If the company changes its credit and collection policy sufficiently to cause its DSO to fall to the industry average,and if it earns 8.0% on any cash freed-up by this change,how would that affect its net income,assuming other things are held constant?
A)$241.45
B)$254.16
C)$267.54
D)$281.62
E)$296.44

Question

Quizplus · Accepted Answer

The Answer of Garcia Industries has sales of $200,000 and accounts receivable of $18,500,and it gives its customers 25 days to pay.The industry average DSO is 27 days,based on a 365-day year.If the company changes its credit and collection policy sufficiently to cause its DSO to fall to the industry average,and if it earns 8.0% on any cash freed-up by this change,how would that affect its net income,assuming other things are held constant?
A)$241.45
B)$254.16
C)$267.54
D)$281.62
E)$296.44

Garcia Industries Has Sales of $200,000 and Accounts Receivable of $18,500,and