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Morgan Valley Inc. has current sales of $550,000. All of its sales are on credit and there is no default. It currently sells on terms
Morgan Valley Inc. has current sales of $550,000. All of its sales are on credit and there is no default. It currently sells on terms of net 30 and has an accounts receivable balance of $70,000.
The company is considering a new credit policy with terms of net 60. Under the new policy, sales are expected to increase to $610,000, and accounts receivable are expected to increase to $140,000.
1. What is the firm's days sales outstanding under the old policy?
2. What is the firm's days sales outstanding under the old policy?
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