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

question 56

Essay

The following information about Douglas Corp.'s Accounts Receivable and Sales are presented below:
Year 2012-Beginning Balance of $\mathrm{A} / \mathrm{R}=\$ 791 \mathrm{M}$
Year 2012 -Ending Balance of $\mathrm{A} / \mathrm{R}=\$ 807 \mathrm{M}$
Year 2012 - Sales $=\$ 3,002 \mathrm{M}$
Assumptions:
Sales growth will be equal to $6 \%$ per year
$\mathrm{A} / \mathrm{R}$ turnover will stay constant throughout the forecast period
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:

Maslow's Hierarchy

A theory of human motivation depicted as a pyramid, with physiological needs at the base, ascending to safety, love and belonging, esteem, and self-actualization at the top.

Peak Experience

Exceptionally joyful or satisfying experiences that involve a heightened sense of wonder, awe, or ecstasy, often considered transformative in one's life.

Psychologically Healthy

A state of well-being in which an individual realizes their own abilities, can cope with the normal stresses of life, work productively, and is able to make contributions to their community.

Correlational Analysis

A statistical method used to assess the strength and direction of the relationship between two or more variables without implying causation.