Logan Manufacturing currently has $1,000,000 in accounts receivable. Its days sales outstanding (DSO) is 40 days. It wants to reduce its DSO to the industry average of 25 days by pressuring customers to pay on time. The Chief Financial Officer (CFO) estimates that average sales will fall by 12% if the policy is adopted. Assuming the firms achieves the DSO of 25 days and suffers the 12% sales decline, what will be the new level of accounts receivable? Assume 1 year =365 days.

Answer rating: 100% (QA)

Okay lets solve this stepbystep Current DSO is 40 days Industry average DSO is 25 days DSO i... View the full answer