Question
averon Corp. sells their carpets on terms that allow customers 45 days to pay for merchandise. Its sales last year were $425,000, and its year-end
averon Corp. sells their carpets on terms that allow customers 45 days to pay for merchandise. Its sales last year were $425,000, and its year-end receivables were $60,000. If its days sales outstanding (i.e., DSO) is less than the 45-day credit period, then customers are paying on time. Otherwise, they are paying late. By how much are customers paying early or late? (Base your answer on this equation: DSO ? Credit period = Days early or late, and use a 365-day year when calculating the DSO. A positive answer indicates late payments, while a negative answer indicates early payments.) Question 2 options:
a) 5.92
b) 6.20
c) 6.53
d) 7.20
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