A firm had credit sales of $15,750,000 last year and its days sales outstanding was 65 days. What was its average receivables balance, based on a 365-day year? A) $4,389,657 B) $2,804,795 C) $1,294,521 D) $3,412,500 E)$7,269,231

A firm had credit sales of $15,750,000 last year and its days sales outstanding was 65 days. What was its average receivables balance, based on a 365-day year? A) $4,389,657 B) $2,804,795 C) $1,294,521 D) $3,412,500 E)$7,269,231

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter3: Evaluation Of Financial Performance

Section: Chapter Questions

Problem 3P

See similar textbooks

Related questions

Q: Which is more valuable, receiving $775 today or receiving $885 in 2.5 years if interest rates are…

A: Present value refers to the current worth of future cash flows, discounted at a specific rate. It is…

Q: Suppose you buy an annual coupon bond with a coupon rate of 6% for $915. The bond has 10 years to…

A: Yield to maturity is the rate of return realized on a bond when the bond is held till the maturity…

Q: The expected return on Stock A is 14%. Its dividend is expected to grow at a expected constant rate…

A: We need to use the expected return formula below to decide the correct option from the list…

Q: OpenSeas, Inc. is evaluating the purchase of a new cruise ship. The ship will cost $500 million, and…

A: Initial cost = $500,000,000Annual cash flow = $70,000,000Number of years = 20 yearsCost of capital =…

Q: You owe the Bank of US $700 in one year, $900 in 3 years, and $1200 in 6 years. How much would it…

A: Let's first understand the question and the information given -Amount due in 1 year$700Amount due in…

Q: We are considering the effects of starting early or late to save for retirement. Assume that each…

A: Future Value Future Value $ 1,000,000.00Interest Rate6%Time for Graduation32Time to…

Q: Calculate the MIRR of the project using all three methods with these interest rates. Note: Do not…

A: MIRR (Modified Internal Rate of Return):The Modified Internal Rate of Return (MIRR) is a financial…

Q: Equity Share Capital = 110000 6 % Preference Share Capital = 30000 General Reserve = 50000…

A: Equity Share Capital = 110,0006% Preference Share Capital = 30,000General Reserve = 50,000Reserve…

Q: Does accounting dilution and/or market value dilution take place? Why?

A: Accounting DilutionAccounting dilution refers to a decrease in earnings per share (EPS) as a result…

Q: A company needs to increase its working capital by (1,346,000 Riyals), the Chief Financial Officer…

A: The effective rate of interest refers to the actual annual interest rate that is earned or paid on…

Q: The following condensed information was reported by Peabody Toys, Incorporated, for 2024 and 2023:…

A: This is mainly designed to analyze fundamental performance and is now widely used in comparing the…

Q: The U.S. Treasury has issued 10-year zero coupon bonds with a face value of $1,000. Assume that the…

A: Current price of bond is the price which can be paid for purchase of the bond. It is also called…

Q: Arms and Armour's new operations manager has redesigned the process to make the Beowulf sword. With…

A: Work in progress refers to the tasks or projects that are currently ongoing or incomplete. It…

Q: A proposed cost-saving device has an installed cost of $530,000. It is in Class 8 (CCA rate = 20%)…

A: Capital Cost Allowance:The capital cost allowance (CCA) is a deduction from an individual's or…

Q: the desired fund of F. Assuming that the fund continues to earn the effective annual interest rate…

A: The concepts of Future Value (FV), Present Value (PV), and PMT (Periodic Payment) are fundamental in…

Q: Gayle has a HELOC with MCAP Financial Corporation at an interest rate of prime +2.5%. Her current…

Q: Ebenezer Scrooge has invested 50% of his money in share A and the remainder in share B. He assesses…

A: Here, ProbExpected ReturnStandard DeviationShare A50%16.00%23.00%Share…

Q: Tangshan Industries has issued a bond which has a $1,000 par value and a 15 percent annual coupon…

A: The yield to maturity refers to the return that the investor earns if they hold the bond till its…

Q: According to MM Theory, in a world with taxes but no other market imperfections, what effect would…

A: Levered cost of equity = Unlevered cost of equity+ ( unlevered cost of equity - cost of…

Q: Better Mousetraps has developed a new trap. It can go into production for an initial investment in…

Q: Baillie Power leased hightech electronic equipment from Courtney Leasing on January 1, 2024.…

A: Amortization schedule:An amortization schedule is a table or chart that outlines the scheduled…

Q: You have a credit card that charges a monthly interest rate of 1.85%. The table below shows your…

A: Unpaid balance from previous month = $1,050.15Monthly interest rate = 1.85%The interest charged on…

Q: A five-year, $3000 note bearing interest at 8% compounded annually was discounted at 12% compounded…

A: Notes are financial instruments that promise to pay the specified amount on the maturity of the…

Q: Assume the betas for securities A, B, and C are as shown here: a. Calculate the change in return for…

A: Beta describes how much a stock's price fluctuates compared to other stocks. It shows the…

Q: Given the following information for Flintstone power Co, find the WACC. Assume the company's tax…

A: Weighted average cost of capital (WACC) is the average cost of capital. It can be calculated by…

Q: A $5,000 bond with a coupon rate of 6.5% paid semiannually has two years to maturity and a yield to…

A: Compound = Semiannually = 2Face Value = fv = $5000Coupon Rate = 6.5 / 2 = 3.25%Time = t = 2 * 2 =…

Q: f 10-year T-bonds have a yield of 6.2%, 10-year corporate bonds yield 9%, the maturity risk premium…

A: An additional amount an investor expects when an investor invests in the risky securities is term as…

Q: Corp. needs to raise $50.5 million to fund a new project. TH al cash offer and the company's…

A: Flotation costs refer to the expenses incurred by a company when it issues new securities, such as…

Q: A local toolmaker makes the best hammers on the market. The head of the hammer costs $16.89 and the…

A: The break-even point refers to the level of sales or revenue at which a company neither makes a…

Q: What is the value today of $68,599 that will be received at the end of 13 year(s) having earned an…

A: The present value of the money to be received in the future is the future value discounted at the…

Q: For questions 1 - 9: A recent university graduate is purchasing a new Honda Civic LX Sedan for…

A: A loan refers to a contract between two parties where one party lends a sum to the other party on…

Q: Currently, the UAE dirham (ISO code AED) trades around USD 0.2723/AED. The inflation rates are…

A: According to Purchase power parity theory,St = So * whereSt = Estimated future rateSo = current spot…

Q: The yield to maturity on 1-year zero-coupon bonds is currently 7%; the YTM on 2-year zeros is 8%.…

A: Yield to maturity is the expected return by the bondholders if they hold the bond till maturity.…

Q: Assume the following relationships for the Caulder Corp.: 1.8x Sales/Total assets Return on assets…

A: The profit margin can be expressed in percentage which depicts the profit percentage on the sales of…

Q: A customer repays a loan of 22,000 that has an effective annual interest rate of 5.15% by making…

A: We take loans to buy large ticket items that otherwise we cannot afford. The loan is then repaid by…

Q: If the assets will be worth $1 180 in one year, the expected return on assets will be %. (Round to…

A: The expected return on assets is the average return that a business or investor anticipates…

Q: You are considering an investment project with the cash flows of -300 (the initial cash flow), 800…

A: MIRR means Modified Internal Rate of Return .It is calculated as follows:-MIRR = - 1where,FV =…

Q: Builtrite Furniture has calculated the average weekly payroll to be $15,000 with a standard…

A: Average = meu = $15,000SD= $3,000Let Z= (X-meu)/SD is a standard normal random…

Q: You find the following corporate bond quotes. To calculate the number of years until maturity,…

A: Coupon payments are the cash inflows from a bond investment that can be realized at regular…

Q: A new electronic process monitor costs $7,000,000. This cost could be depreciated at 30% per year.…

A: NPV is also known as Net Present Value.. It is a capital budgeting technique which helps in decision…

Q: Tubby Toys estimates that its new line of rubber ducks will generate sales of $7 million, operating…

A: Operating cash flows (OCF) is the cash flows generated from normal operations- Selling and producing…

Q: a. Calculate the initial value of the index if a value-weighting scheme is used. Note: Round your…

A: A price-weighted index is a sort of stock market index in which it assigns member companies a weight…

Q: Consider a zero-coupon debt with a face value of $1,000 issued on December 31, 2040. The bond has…

A: Balance of debt principal:The balance of the debt principal refers to the amount of money borrowed…

Q: What would you pay for a $195,000 debenture bond that matures in 15 years and pays $9,750 a year in…

A: Bond price is the discounted value of all future cash flows from the bond namely coupons and the par…

Q: The following table shows projected free cash flows for the next four years for Quick Sky Corp, a…

A: Value of company is the sum of equity and debt and can be found as the present value of free cash…

Q: YNWA Limited has asked you to calculate the return on its ordinary shares to help in its calculation…

A: The required rate of return on stock refers to the minimum return an investor expects to earn in…

Q: A share of stock with a beta of 0.85 now sells for $60. Investors expect the stock to pay a year-end…

Q: ROE is expected to be 10% beginning in year 6 to perpetuity. What is the present value of this…

A: The return on equity assesses a company's profitability in relation to the equity of its owners. It…

Q: Jill will have reached her goal of saving $23,000 to buy a car if she puts away $420 a month in a 7%…

A: Required amount$23,000PMT420Interest rate per year7%Number of years4

Q: You want to buy a nice road bike. You place $2,200 at the end of each year in an investment account…

A: The future value of an annuity is the total amount of money that will accumulate over a series of…

Concept explainers

Receivables Management

Question

A firm had credit sales of $15,750,000 last year and its days sales outstanding was 65 days. What was its average receivables balance, based on a 365-day year?

A) $4,389,657

B) $2,804,795

C) $1,294,521

D) $3,412,500

E)$7,269,231

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1: Analysis

VIEW

Step 2: Calculation of average accounts receivables

VIEW

Solution

VIEW

Step by step

Solved in 3 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.

Similar questions

Ancient Grains Unlimited has an accounts receivable turnover ratio of 3.34 times. The net credit sales for the year are $567,920. What is the days sales in receivables ratio for 2018 (rounded to the nearest whole number)? A. 190 days B. 109 days C. 110 days D. 101 days
Last year, Nikkola Company had net sales of 2.299.500,000 and cost of goods sold of 1,755,000,000. Nikkola had the following balances: Refer to the information for Nikkola Company above. Required: Note: Round answers to one decimal place. 1. Calculate the average accounts receivable. 2. Calculate the accounts receivable turnover ratio. 3. Calculate the accounts receivable turnover in days.
A firm had credit sales of $15,750,000 last year and its days sales outstanding was 65 days. What was its average receivables balance, based on a 365-day year? 1. $1,294,521 2. $3,412,500 3. $7,269,231 4. $2,804,795 5. $4,389,657
If Emperium Inc. had credit sales of 2,027,773 per year and its days sales outstanding was equal to 35 days, what was its average amount of accounts receivable outstanding? (Assume a 365-day year).
Your company had net sales of $100,000 over the past year. One quarter of the sales were credit sales. During that time, average receivables were $5,000. The accounts receivable balance at the end of the year was $5,000. What was the average collection period? What is the average age of receivables (same answer!)? (Assume a 360-day year) O 18 days O 27 days O 36 days O 72 days O 60 days
A company had Sales and Cost of Sales last year of $600 million and $300 million respectively. All sales were on credit terms. If its customers paid their invoices on average at 16 days, what is the company’s average Accounts Receivable balance? (Assume a 365-day year.) a. $26.3 million b. $13.1 million c. $9.4 million d. $18.7 million
5. Krackle Korn Inc. had credit sales of $3.500.000 last year and its days sales outstanding was DSO = 35 days. What was its average receivables balance, based on a 365-day year?
A company has annual sales of $5,210,000 and its average daily accounts receivable is $377,000. What is the average days' sales in receivables? Assume 365 days per year.
TMRW Co. has annual credit sales of $1,080,000 and an average collection period of 32 days in 2010. Assume a 360-day year. What is the company’s average accounts receivable balance? Accounts receivable are equal to the average daily credit sales times the average collection period. XYZ company has annual credit sales of $1,440,000 and an average collection period of 45 days in 2005. Assume a 360 day year. What is the company’s average accounts receivable balance? Accounts receivable are equal to the average daily credit sales time the average collection period. Haru company has an average collection period of 35 days. The accounts receivable balance is $105,000. What is the value of its credit sales?
If Hot Tubs Inc. had sales of $2,027,773 per year (all credit) and its days sales outstanding was equal to 35 days, what was its average amount of accounts receivable outstanding? (Assume a 365-day year.) * a. $ 5,556 b. $212,541 c. $194,444 d. $ 57,143 e. $ 97,222
6. Michaels Corp. has a current accounts receivable balance of $623,410. Credit sales for the year just ended were $5,410,695. What is the receivables turnover? The days’ sales in receivables? How long did it take on average for credit customers to pay off their accounts during the past year?
A firm has $400,000 in credit sales and $100,000 in accounts receivable.Compute accounts receivable turnover and average number of collectiondays. How do these numbers relate to the terms of 2/10, n/30?