Question
Edwards Industries has $430 million in sales. The company expects that its sales will increase 9% this year. Edwards' CFO uses a simple linear regression
Edwards Industries has $430 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 = $10.75 + 0.07(Sales)
A. 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 $25,000,000 should be entered as 25. Round your answer to two decimal places. $ million
B. What are your forecasts of the company's year-end days sales outstanding (DSO) ratio? Assume that DSO is calculated on the basis of a 365-days year. Do not round intermediate calculations. Round your answer to two decimal places. days
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