Question
A firm with sales of $17,000,000 has inventory of $800,000. The firm has no cash sales (all sales are on credit and are collected
A firm with sales of $17,000,000 has inventory of $800,000. The firm has no cash sales (all sales are on credit and are collected within 51 days). You are willing to sell inventory to the firm on credit provided that you will be paid within 94 days. Should you sell to this firm on credit? Assume there are 365 days in a year. (This question is more subtle than it appears. Think through all the given information.) Round your answer to the nearest whole number. On average, it will take you days to receive the payments, therefore, you sell to the firm on credit.
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Basic Finance An Introduction to Financial Institutions, Investments and Management
Authors: Herbert B. Mayo
11th Edition
1285425790, 1285425795, 9781305464988 , 978-1285425795
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