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Question 2 7 Points Sweet Shop has credit sales of $450,000 yearly with customers paying...

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Finance

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Question 2 7 Points Sweet Shop has credit sales of $450,000 yearly with customers paying on average in 70 days. Sweet Shop does not currently offer a discount for early payment. Required: 1. What is the average receivables balance? 2. Assume Sweet Shop offers new trade terms of 2/10, Net 30. All customers take the discount and pay in 10 days, and sales increase by 18 percent as a result of this discount incentive. If Sweet Shop earns 20 percent on sales (before discounts) and can reduce their 4% bank loan due to the early payments, should they offer these new discount terms? Support your answer with all relevant calculations

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