A Firm Has the Following Items on Its Balance Sheet $\$ 3,000,000$

question 1

Essay

A firm has the following items on its balance sheet: inventory
$\$ 3,000,000$
accounts receivable $2,300,000$
The inventory tumover for the industry is 4x and the average collection period is 33 days. If this firm's sales are $9,000,000 and the interest rate is 10 percent, how much could it save in carrying costs if its inventory tumover and average collection period were comparable to the industry average? (To answer, assume that last year's inventory equaled this year's inventory.)

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Definitions:

Attention Gains

Improvements in the ability to selectively concentrate on specific information while ignoring other distractions.

Weeks

Time units equivalent to seven days, used universally to organize and plan activities and events.

Attentiveness

The quality of paying close and continuous attention to something or someone.

Younger Infants

Infants typically ranging from birth to 12 months old, during which rapid physical and cognitive development occurs.