ALei Industries has credit sales of $150 million a year. ALeis management reviewed its credit policy and

Question:

ALei Industries has credit sales of $150 million a year. ALei’s management reviewed its credit policy and decided that it wants to maintain an average collection period of 40 days.
a. What is the maximum level of that ALei can carry and have a 40-day average collection period?
b. If ALei’s current collection period is 50 days, by how much would it have to reduce its level of in order to achieve its goal of 40 days?

Accounts Receivable
Accounts receivables are debts owed to your company, usually from sales on credit. Accounts receivable is business asset, the sum of the money owed to you by customers who haven’t paid.The standard procedure in business-to-business sales is that...