If the firm wishes to maintain an average collection period


Vanity Press, Inc., has annual credit sales of $1,600,000 and a gross profit margin of 35 percent.

a. If the firm wishes to maintain an average collection period of 50 days, what level of accounts receivable should it carry? (Assume a 365-day year.)

b. The inventory turnover for this industry averages six times. If all of Vanity's sales are on credit, what average level of inventory should the firm maintain to achieve the same inventory turnover figure as the industry?

Request for Solution File

Ask an Expert for Answer!!
Financial Management: If the firm wishes to maintain an average collection period
Reference No:- TGS02139817

Expected delivery within 24 Hours