The accounts receivable balance from 2022 to 2023 Axay Corporation had an average days sales outstanding (DSO) periodof 22 days in 2022. An analyst predicts that Axay's DSO will decline in2023 (due to expected improvements in the company's collectionsprocess) to match the industry average of 18 days.Total sales (all on credit) in 2022 were $350 million, and Axay expectstotal credit sales to increase to $380 million in 2023.To achieve the lower DSO, the change in the average accountsreceivable balance from 2022 to 2023 that must occur is closest to:a) -$3.90 millionb) -$2.36 millionc) $2.85 milliond) $3.90 million

Here's how to calculate the change in the average accounts receivable balance:Step 1: Calculate…

Answered: Axay Corporation had an average days…

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter16: Working Capital Policy And Short-term Financing

Section: Chapter Questions

Problem 13P

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