A firm with sales of $22,000,000 has inventory of $800,000. The firm has cash sales (all sales are on credit and are collected within 29 days). You are willing to sell inventory to the firm on credit provided that you will be paid within 50 days. Should you sell to this firm on credit? Assume there are 365 days in a year. (This question is more subtle than it appears. Think through all the given information.) Round your answer to the nearest whole number. On average, it will take you days to receive the payments, therefore, you -Select- ✓sell to the firm on credit.

A firm with sales of $22,000,000 has inventory of $800,000. The firm has cash sales (all sales are on credit and are collected within 29 days). You are willing to sell inventory to the firm on credit provided that you will be paid within 50 days. Should you sell to this firm on credit? Assume there are 365 days in a year. (This question is more subtle than it appears. Think through all the given information.) Round your answer to the nearest whole number. On average, it will take you days to receive the payments, therefore, you -Select- ✓sell to the firm on credit.

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter21: Supply Chains And Working Capital Management

Section: Chapter Questions

Problem 11P: Negus Enterprises has an inventory conversion period of 50 days, an average collection period of 35...

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