Delta Distributors has an investment in accounts receivable of $2,750,000. Daily credit sales are $118,280. If 30% of Delta's credit customers receive a discount by paying within 10 days and the remainder of Delta's customers pay in 40 days,what is the net period that Delta maintains?
A) 19 days
B) 31 days
C) 37 days
D) 40 days
E) None of these.

Question

Quizplus · Accepted Answer

The net period is calculated as a weighted average of the payment periods: (0.3 * 10 days) + (0.7 * 40 days) = 3 + 28 = 31 days.

Delta Distributors Has an Investment in Accounts Receivable of $2,750,000