10.Efficiency analysis ALei Industries has credit sales of $150 million a year. ALei's management reviewed its credit policy and decided that it wants to maintain an average collection period of 40 days.

a. What is the maximum level of accounts receivable that ALei can carry and have a 40-day average collectionperiod?

b. IfALei's current accounts receivable collection period is 50 days, how much would it have to reduce its level of accounts receivable in order to achieve its goal of 40 days?

7.Capital structureanalysis

The liabilities andowners' equity for Campbell Industries is foundhere:

Accounts payable$475,000

Notes payable$243,000

Current liabilities$718,000

Long-term debt $1,105,000

Common equity$5,364,000

Total liabilities and equity $7,187,000

a. What percentage of thefirm's assets does the firm finance using debt(liabilities)?

b. If Campbell were to purchase a new warehouse for $1.3 million and finance it entirely withlong-term debt, what would be thefirm's new debtratio?

(Liquidity Analysis)

6. The King Carpet Company has $2,940,000 in cash and a total of $12,300,000 in current assets. Thefirm's current liabilities equal $6,060,000 such that thefirm's current ratio equals 2.0.

Thecompany's managers want to reduce thefirm's cash holdings down to $1,150,000 by paying $555,000 in cash to expand thefirm's truck fleet and $1,235,000 in cash to retire ashort-term note. If they carry this planthrough, what will happen to thefirm's currentratio?