Confusion Products has projected the following sales for the coming year: Sales in the year following this

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Confusion Products has projected the following sales for the coming year:

Sales in the year following this one are projected to be 15 percent greater in each quarter.

a. Calculate payments to suppliers assuming that the company places orders during each quarter equal to 30 percent of projected sales for the next quarter. Assume that the company pays immediately. What is the payables period in this case?

b. Rework (a) assuming a 90-day payables period.

c. Rework (a) assuming a 60-day payables period.

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Essentials Of Corporate Finance

ISBN: 9780073405131

6th Edition

Authors: Stephen A. Ross, Randolph Westerfield, Bradford D. Jordan

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Question Posted: Apr 24, 2012 07:54 AM

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Confusion Products has projected the following sales for the coming year: Sales in the year following this

Question:

02 03 04 $780 S810 $840 $910 Sales 02 03Q4 Payment of accounts

Step by Step Answer:

a The payables period is zero since the company pays immediately The payment in each period is 30 p...View the full answer

Essentials Of Corporate Finance

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