Pannick Motors has projected the following sales for the coming year. Sales in the year following this one are projected to be 12 percent greater in each quarter.Assume the company places orders during each quarter equal to 45 percent of projected sales for the next quarter.How much will the firm pay its suppliers in quarter 3 if the firm has a 60-day payables period?

Question

Pannick Motors has projected the following sales for the coming year.  Sales in the year following this one are projected to be 12 percent greater in each quarter.Assume the company places orders during each quarter equal to 45 percent of projected sales for the next quarter.How much will the firm pay its suppliers in quarter 3 if the firm has a 60-day payables period?

Quizplus · Accepted Answer

Q₃ payments = 60/90(0.45 × $930) + 30/90(0.45 × $860) = $408

Pannick Motors Has Projected the Following Sales for the Coming