Collins Company Had the Following Partial Balance Sheet and Complete

question 36

Multiple Choice

Collins Company had the following partial balance sheet and complete income statement information for last year: The industry average DSO is 30 (360-day basis) .Collins plans to change its credit policy so as to cause its DSO to equal the industry average,and this change is expected to have no effect on either sales or cost of goods sold.If the cash generated from reducing receivables is used to retire debt (which was outstanding all last year and which has a 10% interest rate) ,what will Collins' debt ratio (Total debt/Total assets) be after the change in DSO is reflected in the balance sheet?

• A) 33.33%
• B) 45.28%
• C) 52.75%
• D) 60.00%
• E) 65.71%

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Definitions:

Drug Tolerance

A physiological condition in which higher doses of a drug are required to achieve the same effect achieved initially, due to the body’s adaptation to the drug.

Classical Conditioning

A pairing method in education where two stimuli are constantly linked; the response, originally triggered by the second stimulus, is over time triggered by just the first stimulus.

Conditioned Stimulus

A previously neutral stimulus that, after becoming associated with an unconditioned stimulus, triggers a conditioned response.

Drug Injection

The act of administering a drug into a person's body using a syringe and needle, typically intravenously, intramuscularly, or subcutaneously.