Problem 2: (10 points)

The following information about Douglas Corp.s Accounts Receivable and Sales are presented below:

	Year 2015-Beginning Balance of A/R = $791M
	Year 2015 -Ending Balance of A/R = $807M
	Year 2015 - Sales = $3,002M
	Assumptions:
		Sales growth will be equal to 6% per year
		A/R turnover will stay constant throughout the forecast period

Required:

a.	Using this information, forecast Douglas Corp.s the growth in Accounts Receivable for years 2016-2020. (please attach excel file)
b.	What problem does a constant A/R turnover assumption cause?
c.	Provide a solution to the problem caused by a constant A/R turnover assumption.