Using the Dating Method, Calculate the Discount Date and the Net

question 95

Short Answer

Using the dating method, calculate the discount date and the net date. Unless otherwise specified, the net date is 20 days after the discount date: $$\begin{array} { l l l l } \text { Date of Invoice } & \text { Terms of Sale } & \text { Discount Date } & \text { Net Date } \\\text {December 10} & 2 / 10 , \mathrm{n} / 30 \end{array}$$

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Definitions:

Free Cash Flow

The amount of cash generated by a company after accounting for capital expenditures, essential for expansion and maintenance of operations.

Net Income

The total earnings of a company after subtracting all expenses, taxes, and costs from total revenue, representing the profit.

Dividends Paid

Cash or other forms of assets distributed by a corporation to its shareholders out of its earnings.

Average Collection Period

The average number of days it takes a company to receive payment after a sale has been made.