What is the maximum level of accounts receivable that ALei can carry and have a 35​-day average collection​ period? b.  If​ ALei's current accounts receivable collection period is 55 ​days, how much would it have to reduce its level of accounts receivable in order to achieve its goal of 35 ​days?

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
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ALei Industries has credit sales of

$146

million a year. ​ ALei's management reviewed its credit policy and decided that it wants to maintain an average collection period of

35

days.

 

a.  What is the maximum level of accounts receivable that ALei can carry and have a
35​-day
average collection​ period?
b.  If​ ALei's current accounts receivable collection period is
55
​days, how much would it have to reduce its level of accounts receivable in order to achieve its goal of
35
​days?
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