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Mahony Company sells on terms of net 30. Annual credit sales are $56.25 million, and its accounts receivable average 10 days overdue. a. Determine Mahony

Mahony Company sells on terms of "net 30." Annual credit sales are

$56.25 million, and its accounts receivable average 10 days overdue.

a. Determine Mahony Company's investment in receivables.

b. Suppose that annual credit sales decline by 15% and customers

delay their payments to an average of 25 days past due. Determine

the company's new level of receivables investment.

Formula: Investment in receivables = Average daily sales x Average collection period

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Previous Question Next Question

Mahony Company sells on terms of "net 30." Annual credit sales are
$56.25 million, and its accounts receivable average 10 days overdue.

	a. Determine Mahony Company's investment in receivables.
	b. Suppose that annual credit sales decline by 15% and customers
	delay their payments to an average of 25 days past due. Determine
	the company's new level of receivables investment.


Formula: Investment in receivables = Average daily sales x Average collection period