Faldo Corp Sells on Terms That Allow Customers 45 Days

question 2

Multiple Choice

Faldo Corp sells on terms that allow customers 45 days to pay for merchandise.Its sales last year were $300,000,and its year-end receivables were $60,000.If its DSO is less than the 45-day credit period,then customers are paying on time.Otherwise,they are paying late.By how much are customers paying early or late? Base your answer on this equation: DSO - Credit Period = Days early or late,and use a 365-day year when calculating the DSO.A positive answer indicates late payments,while a negative answer indicates early payments.Assume all sales to be on credit.Do not round your intermediate calculations.

• A) 27.16
• B) 26.60
• C) 22.12
• D) 28.00
• E) 25.48

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Definitions:

Equilibrium

A state of balance or stability within a system, achieved when various forces or influences are equal and oppositional forces are neutralized.

Natural State

Hobbes’s conception of the human condition before the emergence of formal social structures.

Government

A system or organization through which a community or nation is ruled and regulated.

Self-Interest

A principle that suggests individuals prioritize their own welfare and benefits in decision-making processes.