Q9 Data on Shick Inc. for 2008 are shown below, along with the days sales outsta

Question

Q9

Data on Shick Inc. for 2008 are shown below, along with the days sales outstanding of the firms against which it benchmarks. The firm's new CFO believes that the company could reduce its receivables enough to reduce its DSO to the benchmarks' average. If this were done, by how much would receivables decline? Use a 365-day year.

Select one:

a. $ 8,078

b. $ 9,973

c. $10,970

d. $12,067

e. $ 8,975

Project Data Sales $110,000 Accounts receivable $16,000 Days sales outstanding (DSO) 53.09 Benchmark days sales outstanding (DSO) 20.00

Explanation / Answer

16000-110000*20/365=16000-6027.40=9972.60=$9973

answer B decline by $9973

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