If 20% of the customers pay on day 10 and 80% pay on day 30,the average collection period is:
A) 20 days.
B) 22 days.
C) 26 days.
D) 30 days.
E) None of these.

Question

Quizplus · Accepted Answer

To calculate the average collection period, we can use the following formula:
Average Collection Period = (Percentage of Customers paying on day 10 x Number of days for payment) + (Percentage of Customers paying on day 30 x Number of days for payment)
= (20% x 10) + (80% x 30)
= 2 + 24
= 26 days
Therefore, the answer is option C, 26 days.

If 20% of the Customers Pay on Day 10 and 80