course name Marketing Financial Analysis

Deka DJ's is a small company run by a group of students who spin discs for parties in the Burlington and Milton area. Although they are always busy and insist on a deposit of 50% of the fee, they find they always seem to be out of money. Clarence says its because they spend too much, but Deirdre thinks its because they aren't collecting their bills pointing out that they invoiced $155,000 worth of business in June, July and August, but still have to collect on $72,000 of it. Kundi argues that they have to give people time to pay. Clarence says that if they can find some money he can buy more equipment which will increase their business and provide a 10% ROI. Currently what is the collection period for Deka DJ's ? What would be their investment in accounts receivable if they change their collection period to 30 Days? What would be their reduction in accounts receivable? What would be their Incremental profit