The maximum level of accounts receivable

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Reference no: EM131826153

ALei industries has credit sales of $159 million a year. ALei management reviewed its credit policy and decided that it wants to maintain an average collection period of 45 days.

a. What is the maximum level of accounts receivable that ALei can carry and have a 45-day average collection period?

The maximum level of accounts receivable will be $______million.

b. If ALei's current accounts receivable collection is 60 days, how much would it have to reduce its level of accounts receivable in order to achieve its goal of 45 days?

Ally needs to reduce its accounts receivable by $______million.

(Round to one decimal place.)

Reference no: EM131826153

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