Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Edwards Industries has $430 million in sales. The company expects that its sales will increase 18% this year. Edwards' CFO uses a simple linear regression

Edwards Industries has $430 million in sales. The company expects that its sales will increase 18% 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 = $10.50 + 0.12(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 with AI-Powered 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

Advanced Accounting

Authors: Joe Hoyle, Thomas Schaefer, Timothy Doupnik

10th edition

0-07-794127-6, 978-0-07-79412, 978-0077431808

Students also viewed these Finance questions