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A Firm Has a Days Receivables Outstanding (DRO)of 50 Days

Question 67

Multiple Choice

A firm has a Days Receivables Outstanding (DRO) of 50 days. Its annual sales outstanding are $3.6 billion. If it could reduce its DRO to 36 days, how much cash could it free up for other
Investments? Assume a 360-day year.


A) $360,000,000
B) $370,400,000
C) $140,000,000
D) $222,220,000

Correct Answer:

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