Assignment No. 1
Due Date: 30th-July-2018
The purpose of this activity is to develop skills in students related to debtor administration in
working capital management.
This activity will help students to learn how offering discount to debtors can help reducing debtor
administration cost of any company.
A manufacturing company has decided to reduce its average collection period. The current sales
level is Rs. 25 million and existing credit terms are 45 days. The existing volume of debtors is Rs.
3,125,000. The company is intending to offer discount to its existing customers for early recovery
of accounts receivable. Department for debtor administration is working out discount level that
must be offered to debtors for early payment. Following two proposed plans are under
• Plan A: Offer 5% discount to customers if they pay within 7 days. According to estimates,
45% of customers will avail this opportunity.
• Plan B: Offer 2% discount to customers if they pay within 15 days. According to estimates,
60% of customers will avail this opportunity.
Requirement: If Return On Investment (ROI) of the company is 25%, calculate the net
saving/loss under each proposed discount policy and advise which policy should be accepted?
(Assume 360 days a year)
24 hours extra / grace period after the due date is usually available to overcome uploading
difficulties. This extra time should only be used to meet the emergencies and above mentioned
due dates should always be treated as final to avoid any inconvenience.
OTHER IMPORTANT INSTRUCTIONS:
Please also read the following instructions carefully before attempting the assignment solution.
• Make sure that you upload the solution file before the due date. No assignment will be
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RULES FOR MARKING:
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• It is submitted after the due date.
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• It is cheated or copied from other students, internet, books, journals etc.
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need sol please anyone upload sol
today is last day of submition please anyone help
laraib ap ka course kn sa ha?
tehreem ap ka course kn sa ha
kindly share the FIn622 assigment solution 1 due date 30 july 2018
abi tk ksi ny help ni ki
Here is the solution of 1st assignment