If the Industry Days Sales Outstanding Is 65 Days and a Firm

question 24

Essay

If the industry days sales outstanding is 65 days and a firm with sales of $1,034,550 has receivables of $268,700, how much in interest expense could the firm save if the receivables turn over as quickly as the industry average and the cost of carrying the receivables is 9%?

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Definitions:

Parasympathetic Nervous System

The part of the autonomic nervous system responsible for rest and digestion, reducing the body's fight or flight response.

Pupil Dilation

The expansion of the pupil of the eye, often in response to low light conditions or as an expression of emotion.

Withdrawal Reflex

A spinal reflex that causes immediate withdrawal from a painful or harmful stimulus.

Interneurons

Neurons that transmit impulses between other neurons, especially as part of reflex arcs in the nervous system.