SwenCorp had sales of $154 million this year and an average accounts receivable of $18 million per day. Its credit terms specify "2/14 net 40." On average, how long does it take to collect on its sales?
A) 8.5 days
B) 13 days
C) 28 days
D) 43 days

Question

Quizplus · Accepted Answer

D) Accounts Receivable Days = $154 million / $18 million = 8.5556;
Days taken to collect sales = 365 days / 8.5556 = 42.66 days

SwenCorp Had Sales of $154 Million This Year and an Average