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What is the firm carrying cost on accounts receivable

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Question - The National Co. has an inventory conversion period of 60 days, a receivable conversion period of 35 days, and a payable payment period of 45 days. The National Co.'s variable cost ratio is 65% and annual fixed costs of P600,000. The current cost of capital for National Co. is 12%. If National Co.'s annual sales are P3,375,000 and all sales are on credit, what is the firm's carrying cost on accounts receivable, using 360 days year?

Reference no: EM133126433

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