Question from Dec 12 - Graffoff — OpenTuition Forums

Jjemma24211y ago

I have completed the question above which is based on franchising but i have a question... In the answer Receivable days = 260/1600 x 365 = 59.31 and it says that if the company used its average of 30 days it would release funding of $128,500. Could you explain how this figure has been calculated please? Thanks Jemma

kengarrettTutor11y ago#1

Sales per day = 1600/365 = 4.3836 If collection period falls from 59.31 to 30, 29.31 days of sales will be received earlier. 4.3836 x 29.31 = 128.5