Optimal Credit Policy1. In principle, how should we decide the optimal credit policy?Credit Analysis2. What is the information commonly used to assess creditworthiness of a client?Collection Policy3. Major Electronics sells 85,000 personal stereos each year at a price per unit of $55. All sales are on credit; the terms are 3/15, net 40. The discount is taken by 40 percent of the customers. What is the investment in accounts receivable? In reaction to a competitor, Major Electronics is considering changing its credit terms to 5/15, net 40, to preserve its sales level. Describe qualitatively how this policy change will affect the company’s investment in accounts receivable.
Solution ID:10036750 | Question answered on 16-Oct-2016
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