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Finance Assignment | Top Essay Writing

  • Advise Siyadula if it should change its credit terms. Show all calculations to support your advice.
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Siyadula Enterprises’ credit terms are currently 3/10 net 30 days. In order to stimulate sales, the business is considering changing its credit terms to 5/15 net 30 days. The following information relates to the current and proposed terms: Get Finance homework help today

Current Proposed
Selling price R220 R220
Variable costs R80 R80
Debtors collection period 40 days 35 days
Credit sales 12 000 units 15 000 units
Bad debts 2% of sales 1% of sales
Percentage of customer who makes use of the discount 40% 60%
The required rate of return 16% 16%

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