Cannon Company Has Enjoyed a Rapid Increase in Sales in Recent

question 28

Multiple Choice

Cannon Company has enjoyed a rapid increase in sales in recent years,following a decision to sell on credit.However,the firm has noticed a recent increase in its collection period.Last year,total sales were $1 million,and $250,000 of these sales were on credit.During the year,the accounts receivable account averaged $41,664.It is expected that sales will increase in the forthcoming year by 50 percent,and,while credit sales should continue to be the same proportion of total sales,it is expected that the days sales outstanding will also increase by 50 percent.If the resulting increase in accounts receivable must be financed by external funds,how much external funding will Cannon need?

• A) $41,664
• B) $52,086
• C) $47,359
• D) $106,471
• E) $93,750

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Definitions:

Enterprise Social Media

Platforms and technologies used within companies to enable employees to network, collaborate, and share information.

Miscommunication

A failure to convey or understand messages accurately, leading to misunderstanding and confusion.

Electronic Meeting

A meeting conducted using electronic means, such as video conferencing or webinars, allowing participants to interact in real-time without being physically present in the same location.

Enterprise Social Media

Digital platforms used within companies to improve communication, collaboration, and knowledge sharing among employees, enhancing organizational engagement and productivity.