In 2015, XYZ Corp. had an annual cost of goods sold of $365 million. XYZ'saverage accounts receivable balance in 2015 was $35 million, and theiraverage accounts payable balance was $10 million. The terms that XYZreceives on trade credit from its suppliers are 3/20, net 30. Is XYZmanaging its accounts payable well? Why/why not?No, because they are paying their suppliers too lateNo, because they are paying their suppliers too earlyYes, because they are strategically stretching their bills past the due dateYes, because they are paying their suppliers on the last day to get the discount

Answer: Option . No, because they are paying their suppliers too early. Explanation.Days Purchase…

Answered: In 2015, XYZ Corp. had an annual cost…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Presented below is information for Windsor, Inc. for 2017: 1. Beginning-of-the-year Accounts Receivable balance was $173,000. Net sales for the year were $1,400,000. $150,000 of the sales were cash sales. Windsor does not offer cash discounts for 2. early payment. 3. Collections on accounts receivable during the year were $1,202,000. Windsor plans to factor accounts receivable totaling $60,000 at the end of the year. Windsor will transfer the accounts to Herzog Factors, Inc. with recourse. Herzog Factors will retain 3% of the balances for probable adjustments and assesses a finance charge of 5%. The fair value of the recourse obligation is $1,600.
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