I need correct answer general accounting not use ai Assuming that a company has $365 million in annual salesand a gross margin of 20%. If the company now takes 30days, on average, to collect Accounts Receivable, howmuch does the company have invested in (that is, tied upin) Accounts Receivable? If the company were to take 31days, on average, to collect Accounts Receivable, insteadof 30 days, how much additional investment in AccountsReceivable would be required?

Step 1: Define Average Collection PeriodThe time that a company needs to convert its receivables…

Answered: Assuming that a company has $365…

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter22: Providing And Obtaining Credit

Section: Chapter Questions

Problem 2MC

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If a firm has sales of $21,764,000 a year, and the average collection period for the industry is 55 days, what should this firm’s accounts receivable be if the firm is comparable to the industry? Assume there are 365 days in a year. Do not round intermediate calculations. Round your answer to the nearest dollar.
If a firm has sales of $25,689,00 a year, and the average collection period for the industry is 45 days, what should this firm's accounts receivable be in the firm is comparable to the industry?
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Negus Enterprises has an inventory conversion period of 50 days, an average collection period of 35 days, and payables deferral period of 25 days. Assume that the costs of goods sold are 80% of its sales. a) What is the length of the firm's cash conversion cycle? b) If Negus's annual sales are $4,380,000 and all sales are on credit, what is the firm's investment in accounts receivable? c) How many times per year does Negus Enterprises turn over its inventory?
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