A firm with sales of $22,000,000 has inventory of $800,000. The firm has cash sales (all sales are on credit and are collected within 29 days). You are willing to sell inventory to the firm on credit provided that you will be paid within 50 days. Should you sell to this firm on credit? Assume there are 365 days in a year. (This question is more subtle than it appears. Think through all the given information.) Round your answer to the nearest whole number. On average, it will take you days to receive the payments, therefore, you -Select- ✓sell to the firm on credit.
A firm with sales of $22,000,000 has inventory of $800,000. The firm has cash sales (all sales are on credit and are collected within 29 days). You are willing to sell inventory to the firm on credit provided that you will be paid within 50 days. Should you sell to this firm on credit? Assume there are 365 days in a year. (This question is more subtle than it appears. Think through all the given information.) Round your answer to the nearest whole number. On average, it will take you days to receive the payments, therefore, you -Select- ✓sell to the firm on credit.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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