A Firm Is Planning to Improve Collections Next Year

question 125

Multiple Choice

A firm is planning to improve collections next year. Management has forecast an ACP of 45 days which is a substantial improvement over the current ACP. Next year's sales are expected to be $120M. Next year's ending receivables balance should be planned at (Make calculations using ending balances and a 360-day year.)

• A) $10M
• B) $15M
• C) $16.5M
• D) $22M

---

Definitions:

Substage

A division or smaller part that forms a component of a larger stage or phase.

Direct Contact

Physical interaction between an infected person or contaminant and a susceptible host, leading to the potential transfer of disease.

Condenser

Part of a microscope substage that regulates the amount of light directed on a specimen.

Magnified Specimen

A sample that has been enlarged using a microscope or other magnification tool for detailed examination.