A company has annual sales of $5,390,000 and its average daily accounts receivable is $383,000. What is the average days' sales in receivables? Assume 365 days per year. (Show your work)
Multiple Choice:
a. 22.17 times
b. 28.82 times
c. 25.94 times
d. 14.07 times
e. 30.26 times
Calculation of average day sales:
Average day sales= 365*accounts receivable/sales
Average day sales= 365*383000/5390000= 25.94
So correct answer is c) 25.94 times
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