A firm with Rs.100 cr credit sales is looking to relax its credit policy such that its average collection period will increase from 21 days to 24 days which in turn will result in Rs.10 cr increase in sales, what will the the incremental change in receivables? (assume 360 days year and entire sales as credit sales)Rs. 1.5 crRs. 1 crRs. 2.5 crRs. 7.33 cr

The average collection period for receivables is computed by dividing 365 days byGroup of answer choicesnet credit salesaverage accounts receivableending accounts receivableaccounts receivable turnover ratio

Increasing the credit period from 30 to 60 days, in response to a similar action taken by all of our competitors, would likely result in: A. higher profits B. an increase in the average collection period. C. a decrease in bad debt losses. D. an increase in sales.

Henderson Office Supplies is considering a more liberal credit policy to increase sales, but it expects that 7 percent of the new accounts will be uncollectible. Collection costs are 6 percent of new sales, production costs are 73 percent of sales, and accounts receivable turnover is six times. Assume an increase in sales of $75,000. No other asset buildup will be required to service the new accounts. a. What is the level of investment in accounts receivable to support this sales expansion? Investment in accounts receivable           $  b. What would be Henderson’s incremental before‐tax return on investment? Return on incremental investment            % c. Should Henderson liberalize credit if a 35 percent before‐tax return is required (opportunity cost of capital)? multiple choice 1YesNo Assume Henderson also needs to increase its level of inventory to support new sales and that inventory turnover is two times on Cost of Goods Sold. d. What would be the total incremental investment in accounts receivable and inventory to support a $75,000 increase in sales? Total incremental investment           $  e. Given the income determined in part b and the investment determined in part d, should Henderson extend more liberal credit terms? multiple choice 2YesNo

Fill in the Blank QuestionFill in the blank question.A company has days' sales in accounts receivable of 25 days; days' sales in inventory of 45 days, and days' payable outstanding of 50 days. The cash conversion cycle is _.

Greene Sisters has a DSO of 20 days. The company’s average daily sales are $20,000.What is the level of its accounts receivable? Assume there are 365 days in a year