he Brenmar Sales Company had a gross profit margin (gross profits÷sales) of 34 percent and sales of $8.3 million last year. 79 percent of the firm's sales are on credit, and the remainder are cash sales. Brenmar's current assets equal $1.5 million, its current liabilities equal a. If Brenmar's accounts receivable equal $563,000, what is its average collection period? b. If Brenmar reduces its average collection period to 25 days, what will be its new level of accounts receivable? c. Brenmar's inventory turnover ratio is 8.9 times. What is the level of Brenmar's inventories? $303,100, and it has $104,400 in cash plus marketable securities.
he Brenmar Sales Company had a gross profit margin (gross profits÷sales) of 34 percent and sales of $8.3 million last year. 79 percent of the firm's sales are on credit, and the remainder are cash sales. Brenmar's current assets equal $1.5 million, its current liabilities equal a. If Brenmar's accounts receivable equal $563,000, what is its average collection period? b. If Brenmar reduces its average collection period to 25 days, what will be its new level of accounts receivable? c. Brenmar's inventory turnover ratio is 8.9 times. What is the level of Brenmar's inventories? $303,100, and it has $104,400 in cash plus marketable securities.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Question
he Brenmar Sales Company had a gross profit margin (gross
profits÷sales)
of
34
percent and sales of
$8.3
million last year.
79
percent of the firm's sales are on credit, and the remainder are cash sales. Brenmar's current assets equal
$1.5
million, its current liabilities equal
a. If Brenmar's accounts receivable equal
$563,000,
what is its average collection period?b. If Brenmar reduces its average collection period to
25
days, what will be its new level of accounts receivable?c. Brenmar's inventory turnover ratio is
8.9
times. What is the level of Brenmar's inventories?$303,100,
and it has
$104,400
in cash plus marketable securities.Expert Solution
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