ALei Industries has credit sales of $158 million a year. Alley's management reviewed its credit policy...

70.2K

Verified Solution

Question

Finance

ALei Industries has credit sales of $158 million a year. Alley'smanagement reviewed its credit policy and decided that it wants tomaintain an average collection period of 35 days.
A. What is the maximum level of accounts receivable that ALeican carry and have a 35-day average collection period?
B. If ALei's current accounts receivable collection period is 60days, how much would it have to reduce its level of accountsreceivable in order to achieve its goal of 35 days?
HELP PLEASE.

Answer & Explanation Solved by verified expert

4.1 Ratings (595 Votes)

AAverage collection period Accounts receivable Daily creditsales35 days Accounts receivable 158000000 365 daysAccounts receivable 15150685Thus the maximum level of See Answer

Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:

Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!

Become a Member

Transcribed Image Text

ALei Industries has credit sales of $158 million a year. Alley'smanagement reviewed its credit policy and decided that it wants tomaintain an average collection period of 35 days.A. What is the maximum level of accounts receivable that ALeican carry and have a 35-day average collection period?B. If ALei's current accounts receivable collection period is 60days, how much would it have to reduce its level of accountsreceivable in order to achieve its goal of 35 days?HELP PLEASE.