Question
Asked Nov 26, 2019
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Please show all equations and work as needed. If possible, please type the work so that it may be copied and pasted. Thank you.

8
The Manana Corporation had annual sales of
$60 million that occurred evenly throughout the
365 days of the year. Its accounts receivable
balance averaged $2 million. How long, on
average, does it take the firm to collect on its
sales?
12.2 days
19.1 days
15.8 days
25.2 days
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8 The Manana Corporation had annual sales of $60 million that occurred evenly throughout the 365 days of the year. Its accounts receivable balance averaged $2 million. How long, on average, does it take the firm to collect on its sales? 12.2 days 19.1 days 15.8 days 25.2 days

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Expert Answer

Step 1

Average collection period is the time period by which the seller can receive the cash on credit sales.

Step 2

Given:

Annual credit sale = $60 million

Account receivable = $2 million

No. of days in a year = 365 days.

Step 3

Formula us...

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Accounts recievab le -x 365 Average collection period Credit sale

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