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

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Lewellen 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 Lewellen 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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Corporate Finance

ISBN: 978-0077861759

10th edition

Authors: Stephen Ross, Randolph Westerfield, Jeffrey Jaffe

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Question Posted: Aug 28, 2014 10:33 AM

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

Question:

Ql Q2 23 04 Sales $620 $555 $705 $780 Ql Q2 04 Payment of accounts $

Step by Step Answer:

a The payables period is zero since the company pays immediately Sales in the year following this on...View the full answer

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