Question
ABC company currently has 750,000 in accounts receivable. Its day sales outstanding is 55 days. ABC company wants to reduce its DSO to the industry
ABC company currently has 750,000 in accounts receivable. Its day sales outstanding is 55 days. ABC company wants to reduce its DSO to the industry average of 35 days by pressuring more its customers to pay their bills on time. The companys CFO estimates that if this policy is adopted ABC average sales will fall by 15%. Assuming that the company adopts this change and succeeds in reducing its average collection period to 35 days and does lose 15% of its sales what will be the level of accounts receivable (to the nearest peso) following the change?
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