Data on Nathan Enterprises for the Most Recent Year Are

question 30

Multiple Choice

Data on Nathan Enterprises for the most recent year are shown below, along with the days sales outstanding of the firms against which it benchmarks. The firm's new CFO believes that the company could reduce its receivables enough to reduce its DSO to the benchmarks' average. If this were done, by how much would receivables decline? Use a 365-day year.
$\begin{array}{lr}\text { Sales } & \$ 110,000 \\\text { Accounts receivable } & \$ 16,000 \\\text { Days sales outstanding (DSO) } & 53.09 \\\text { Benchmark days sales outstanding (DSO) } & 20.00\end{array}$

• A) $8,078
• B) $8,975
• C) $9,973
• D) $10,970
• E) $12,067

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Definitions:

Erythropoietin

A hormone produced by the kidneys that promotes the formation of red blood cells in the bone marrow.

Erythropoiesis

The process of producing red blood cells (erythrocytes) in the bone marrow, regulated by the hormone erythropoietin.

Folate

A B-vitamin essential for red blood cell formation, healthy cell growth and function, and the prevention of certain birth defects.

Vitamin K

A fat-soluble vitamin essential for the synthesis of proteins required for blood coagulation and the binding of calcium in bones and other tissues.