Question
In: Finance
(Efficiency analysis) ALei Industries has credit sales of $145 million a year. ALei's management reviewed...
(Efficiency analysis) ALei Industries has credit sales of $145 million a year. ALei's management reviewed its credit policy and decided that it wants to maintain an average collection period of 40 days.
a. What is the maximum level of accounts receivable that ALei can carry and have a 40-day average collection period?
b. If ALei's current accounts receivable collection period is 50 days, how much would it have to reduce its level of accounts receivable in order to achieve its goal of 40 days?
Solutions
jeff jeffy answered 9 months agoRelated Solutions
ALei Industries has credit sales of $151 million a year. ALei's management reviewed its credit...
ALei Industries has credit sales of $151 million a year.
ALei's management reviewed its credit policy and decided that it
wants to maintain an average collection period of 40 days.
a. What is the maximum level of accounts receivable that ALei
can carry and have 40-day average collection period?
b. If ALei's current accounts receivable collection period is
50 days, how much would it have to reduce its level of accounts
receivable in order to achieve its goal of...
ALei Industries has credit sales of $154 million a year. ALei's management reviewed its credit policy...
ALei Industries has credit sales of $154 million a year. ALei's
management reviewed its credit policy and decided that it wants to
maintain an average collection period of 40 days.
a. What is the maximum level of accounts receivable that ALei
can carry and have a 40 -day average collection period?
b. If ALei's current accounts receivable collection period is 50
days, how much would it have to reduce its level of accounts
receivable in order to achieve its goal...
ALei Industries has credit sales of $158 million a year. Alley's management reviewed its credit policy...
ALei Industries has credit sales of $158 million a year. Alley'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 60
days, how much would it have to reduce its level of accounts
receivable in order to achieve its goal of...
1. Inventory Management Williams & Sons last year reported sales of $145 million, cost of goods sold...
1. Inventory Management
Williams & Sons last year reported sales of $145 million,
cost of goods sold (COGS) of $120 and an inventory turnover ratio
of 5. The company is now adopting a new inventory system. If the
new system is able to reduce the firm's inventory level and
increase the firm's inventory turnover ratio to 8 while maintaining
the same level of sales and COGS, how much cash will be freed up?
Do not round intermediate calculations. Round your answer...
Last year LaCroix Optical had $145 million of sales, and it had $40 million of fixed...
Last year LaCroix Optical had $145 million of sales, and it had
$40 million of fixed assets that were used at 75% of capacity. Use
this information to solve the next two problems.
In millions, by how much could LaCroix Optical sales increase
before it is required to increase its fixed assets?
LaCroix Optical was approached by the Department of Defense
(DoD)because of their ability to manufacture the lens required for
night vision goggles. LaCroix Optical is the last remaining...
Last year LaCroix Optical had $145 million of sales, and it had $40 million of fixed...
Last year LaCroix Optical had $145 million of sales, and it had
$40 million of fixed assets that were used at 75% of capacity. Use
this information to solve the next two problems.
(10 points) In millions, by how much could LaCroix Optical
sales increase before it is required to increase its fixed
assets?
(10 points) LaCroix Optical was approached by the Department of
Defense (DoD)because of their ability to manufacture the lens
required for night vision goggles. LaCroix Optical...
Tara's textiles currently has credit sales of 360 million per year and a collection period of...
Tara's textiles currently has credit sales of 360 million per
year and a collection period of 60 days. Assume that the price of
Tara's products is $60 per unit and that the variable costs are $55
per unit. The firm is considering an accounts receivable charge
that will result in a 20% increase in sales and a 20% increase in
the average collection period. No changes in bad debt is expected.
The firm's equal risk opportunity cost on its investment...
95. Wichita Industries' sales are 10% for cash and 90% on credit. Credit sales are collected...
95.
Wichita Industries'
sales are 10% for cash and 90% on credit. Credit sales are
collected as follows: 30% in the month of sale, 60% in the next
month, and 10% in the following month. On December 31, the accounts
receivable balance includes $32,000 from November sales and $42,000
from December sales. Assume that total sales for January and
February are budgeted to be $70,000 and $140,000, respectively.
What are the expected cash receipts for February from current and
past...
Leyton Lumber Company has sales of $8 million per year, all on credit terms calling for...
Leyton Lumber Company has sales of $8 million per year, all on
credit terms calling for payment within 30 days, and its accounts
receivable are $1.6 million. Assume 365 days in year for your
calculations.
What is Leyton's DSO? Round your answer to two decimal
places.
What would DSO be if all customers paid on time? Round your
answer to two decimal places.
How much capital would be released if Leyton could take actions
that led to on-time payments? Round...
Elsee, Inc., has net sales of $16 million, and 75 percent of these are credit sales....
Elsee, Inc., has net sales of $16 million, and 75 percent of
these are credit sales. Its cost of goods sold is 65 percent of
annual net sales. The firm’s cash conversion cycle is 58.0 days.
The inventory balance at the firm is $1,842,000, while its accounts
payable balance is $2,387,000. What is the firm’s accounts
receivable balance? (Round intermediate calculations to
1 decimal places, e.g. 15.1. and final answer to nearest whole
dollar, e.g. 5,275.)
The firm’s accounts
receivables...
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