Problem 9-18 A firm with sales of $17,000,000 has inventory of $800,000. The firm has no cash sales (all sales are on credit and are collected within 57 days). You are willing to sell inventory to the firm on credit provided that you will be paid within 97 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 should sell to the firm on credit. 21

Problem 9-18 A firm with sales of $17,000,000 has inventory of $800,000. The firm has no cash sales (all sales are on credit and are collected within 57 days). You are willing to sell inventory to the firm on credit provided that you will be paid within 97 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 should sell to the firm on credit. 21

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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