Grunewald industries sells on terms of 210 net 40 gross, Ask an Expert

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Grunewald Industries sells on terms of 2/10, net 40. Gross sales last year were $4,562,500 and accounts receivable averaged $437,500. Half of Grunewald's customers paid on the 10th day and took discounts. What are the nominal and effective costs of trade credit to Grunewald's non discount customers? (Hint: Calculate daily sales based on a 365-day year, and then calculate average receivables of discount customers, and then find the DSO for the non discount customers.)

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M91600936

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