The Following Information About Douglas Corp $\mathrm { A } / \mathrm { R } = \$ 791 \mathrm { M }$

question 53

Essay

The following information about Douglas Corp.'s Accounts Receivable and Sales are presented below:
Year 2012-Bepining Balance of $\mathrm { A } / \mathrm { R } = \$ 791 \mathrm { M }$
Year 2012 -Eaflin Balance of $\mathrm { A } / \mathrm { R } = \$ 807 \mathrm { M }$
Year $2012 -$ Sales $= 33,002 \mathrm { M }$
A5sumptians:
Sales growth will be equal to $6 \%$ per year
A/R turnover will stay canstant thraughout the farecast periot
Required: a.Using this information,forecast Douglas Corp.'s the growth in Accounts Receivable for years 2013-2017.
b.What problem does a constant A/R turnover assumption cause?
c.Provide a solution to the problem caused by a constant A/R turnover assumption.

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Definitions:

Advertising

The process or occupation involved in creating promotional content for goods or services.

Predicted Amount

The value estimated based on a model or regression equation representing the expected outcome.

Dollars

A unit of currency used in various countries, typically represented by the symbol $.

Simple Linear Regression

A statistical method that models the linear relationship between a dependent variable and one independent variable.