The Jeremy Flores Club has annual revenue of EUR 7 million and all sales are on account. Good credit and collection performance in the club industry result in a 30-day ACP (Average Collection Period). Assume a year has 365 days. Determine the maximum receivables balance the club can tolerate and still receive a good rating for credit and collections. If the Jeremy Flores Club is currently collecting receivables in 35 days, by how much must the receivable balance be reduced.

The Jeremy Flores Club has annual revenue of EUR 7 million and all sales are on account. Good credit and collection performance in the club industry result in a 30-day ACP (Average Collection Period). Assume a year has 365 days. Determine the maximum receivables balance the club can tolerate and still receive a good rating for credit and collections. If the Jeremy Flores Club is currently collecting receivables in 35 days, by how much must the receivable balance be reduced.

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter17: The Management Of Cash And Marketable Securities

Section: Chapter Questions

Problem 2P

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