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McDowell Industries sells on terms of 3/10, net 30. Total

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McDowell Industries sells on terms of 3/10, net 30. Total sales for the year are $912,500. 40% of the customers pay on the 10th day and take discounts; the other 60% pay on average, 40 days after their purchases.

1. what is the days sales outstanding?
2. what is the average amount of receivables?
3. What would happen to average receivables if McDowell toughened up on its collection policy with result that all non discount customers paid on the 30th day?

Please show calculations. Thank you
Submitted: 7 years ago.
Category: Homework
Expert:  Neo replied 7 years ago.
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