John Plc has an annual sale of 160 million a year. Fifty per- cent of their...

 

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John Plc has an annual sale of €160 million a year. Fifty per- cent of their sales are on credit. The management has decided to maintain an average collection period of 45 days. a. What is the maximum level of accounts receivable that John Plc can carry and meet their collection period target? b. If John Plc has an average collection period of 60 days, how much does it need to reduce its level of debtors or accounts receivables in order to achieve its new goal of 45 days? John Plc has an annual sale of €160 million a year. Fifty per- cent of their sales are on credit. The management has decided to maintain an average collection period of 45 days. a. What is the maximum level of accounts receivable that John Plc can carry and meet their collection period target? b. If John Plc has an average collection period of 60 days, how much does it need to reduce its level of debtors or accounts receivables in order to achieve its new goal of 45 days?

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a To determine the maximum level of accounts receivable that John Plc can carry and meet their colle... View the full answer