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:

Q1 Q2 Q3 Q4 Q4 $1,430 $1,360 $1,590 $1,670 Sales

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?

Q1 Q2 Q2 Q3 Q4 04 Payment of accounts 2$ 2$ 2$ %24 %24 %24 %24

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

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

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Related Book For  answer-question

Corporate Finance Core Principles and Applications

ISBN: 978-1259289903

5th edition

Authors: Stephen Ross, Randolph Westerfield, Jeffrey Jaffe, Bradford Jordan

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