Company average balance in accounts payable

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1. ABC Company has an average collection period of 37 days and factors all of its receivables immediately at a 2.1 percent discount. Assume all accounts are collected in full. What is the firm's effective cost of borrowing?

2. ABC Company has a cash cycle of 13.67 days, an operating cycle of 18.75 days, and an average collection period of 5 days. The company reported cost of goods sold of $257,507. What is the company's average balance in Accounts Payable?

3. ABC Company has annual sales of $394,674 and cost of goods sold of $198,600. The average accounts receivable balance is $68,898. How many days on average does it take the firm to collect its accounts receivable? Assume 365 days.

Reference no: EM131972553

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