Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Edwards Industries has $410 million in sales. The company expects that its sales will increase 9% this year. Edwards' CFO uses a simple linear regression

Edwards Industries has $410 million in sales. The company expects that its sales will increase 9% 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 = $13.50 + 0.11(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? Enter your answer in millions. For example, an answer of $25,400,000 should be entered as 25.40. Do not round intermediate calculations. Round your answer to two decimal places. $ ______ million

What are your forecasts of the company's year-end days sales outstanding (DSO) ratio? Assume 365 days in year for your calculations. Do not round intermediate calculations. Round your answer to two decimal places. ______ days

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Project Financing Asset-Based Financial Engineering

Authors: John D Finnerty

3rd Edition

1118421841, 9781118421840

More Books

Students also viewed these Finance questions