Please help with steps to solve parts (b) and (c):
Barans Company currently has an average collection period of 55 days and annual sales of $1 billion. Assume a 365-day year.
a. What is the firm's average accounts receivable balance?
b. If the variable cost of each product is 65 percent of sales, what is the average investment in accounts receivable?c. If the equal-risk opportunity cost of the investment in accounts receivable is 12 percent, what is the total annual cost of the resources invested in accounts receivable?
Dear Student Please find... View the full answer