Fara Corporation has accounts receivable of P400,000. Its manufacturing cost approximates 35 percent of selling price. The before-tax profit margin is 16 percent, and the inventory carrying cost is 4 percent of the selling price. Sales commissions are 7 percent of sales. What is Fara's average investment in accounts receivable? a. P64,000.00 b. P84,000.00 c. P164,000.00 d. P184,000.00 e. P284,000.00
Fara Corporation has accounts receivable of P400,000. Its manufacturing cost approximates 35 percent of selling price. The before-tax profit margin is 16 percent, and the inventory carrying cost is 4 percent of the selling price. Sales commissions are 7 percent of sales. What is Fara's average investment in accounts receivable? a. P64,000.00 b. P84,000.00 c. P164,000.00 d. P184,000.00 e. P284,000.00
Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter21: Supply Chains And Working Capital Management
Section: Chapter Questions
Problem 9P: Grunewald Industries sells on terms of 2/10, net 40. Gross sales last year were 4,562,500 and...
Related questions
Question
choose the letter of the correct answer
Fara Corporation has accounts receivable of P400,000. Its
a. P64,000.00
b. P84,000.00
c. P164,000.00
d. P184,000.00
e. P284,000.00
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps
Recommended textbooks for you
Intermediate Financial Management (MindTap Course…
Finance
ISBN:
9781337395083
Author:
Eugene F. Brigham, Phillip R. Daves
Publisher:
Cengage Learning
Intermediate Financial Management (MindTap Course…
Finance
ISBN:
9781337395083
Author:
Eugene F. Brigham, Phillip R. Daves
Publisher:
Cengage Learning