Question
Zlema Corporation sells $1,387,000 worth of assorted inflated balls, the kind that are used for basketball, volleyball and soccer. On any specific date, they have
Zlema Corporation sells $1,387,000 worth of assorted inflated balls, the kind that are used for basketball, volleyball and soccer. On any specific date, they have on average, $190,000 worth of outstanding invoices that have not been paid yet by their customers. a. What is Zlema Corporations average collection period? b. Zlemas competitors offer their customers credit terms of 30 days. By how much money would Zlema reduce its investment in accounts receivable if it collected its invoices in 30 days? c. If Zlema could earn 12% a year on investment in its capital assets, how much would the company earn annually if it collected its accounts receivable in 30 days?
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