Aziz Industries Has Sales of $100,000 and Accounts Receivable of $11,500,and

question 30

Multiple Choice

Aziz Industries has sales of $100,000 and accounts receivable of $11,500,and it gives its customers 30 days to pay.The industry average DSO is 27 days,based on a 365-day year.If the company changes its credit and collection policy sufficiently to cause its DSO to fall to the industry average,and if it earns 8.0% on any cash freed up by this change,how would that affect its net income,assuming other things are held constant?

• A)$281.41
• B)$296.22
• C)$311.81
• D)$328.22

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Definitions:

Possible Outcomes

All the potential results that may arise from a specific set of circumstances or an experiment.

Binomial Distribution

A probability distribution that describes the number of successes in a fixed number of independent trials, with each trial having the same probability of success.

Variance

An indicator of how much a dataset varies or is spread out from the average value.

Independent Replications

Separate instances of running a simulation or experiment where the initial conditions or random elements are independently generated each time.