Question
14. Edwards Industries has $450 million in sales. The company expects that its sales will increase 12% this year. Edwards' CFO uses a simple linear
14. Edwards Industries has $450 million in sales. The company expects that its sales will increase 12% this year. Edwards' CFO uses a simple linear regression to forecast the company's receivables level for a given level of projected sales. On the basis of recent history, the estimated relationship between receivables and sales (in millions of dollars) is as follows: Receivables 9.25 + 0.09(Sales) Given the estimated sales forecast and the estimated relationship between receivables and sales, what are your forecasts of the company's year-end balance for receivables and its year-end days sales outstanding (DSO) ratio? Assume that DSO is calculated on the basis of a 365-day year
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