Melton Electronics currently has an average collection period of 35 days and annual sales of $72 million Assume a 365 day year a What is the firms average accounts receivable balance b If the variable cost of each product is 70 of sales, what is the firms average investment in accounts receivable c...

a The firms average receivables balance is 72000000 35365 690411 ...

Melton Electronics currently has an average collection period of 35 days and annual sales of $72 million.

Question:

Melton Electronics currently has an average collection period of 35 days and annual sales of $72 million. Assume a 365-day year.
a. What is the firm’s average balance?
b. If the variable cost of each product is 70% of sales, what is the firm’s average investment in If the equal-risk of the investment in is 16%, what is the total annual cost of the resources invested in Suppose that Melton can shorten the average collection period to 30 days by offering a cash discount of 1% for early payment, and 60% of the customers take this discount. Should the firm offer this discount? Assume that its cost of bad debts will rise by $150,000 per year.

Accounts Receivable
Accounts receivables are debts owed to your company, usually from sales on credit. Accounts receivable is business asset, the sum of the money owed to you by customers who haven’t paid.The standard procedure in business-to-business sales is that... Opportunity Cost
Opportunity cost is the profit lost when one alternative is selected over another. The Opportunity Cost refers to the expected returns from the second best alternative use of resources that are foregone due to the scarcity of resources such as land,...