Accounts receivable and costs. Randolph Company currently has an average collection period of 45 days and annual credit sales of $1 million. Assume a 360-day year.
What is the firm’s average accounts receivable balance?
If the variable cost of each product is 60% of sales, what is the average investment in accounts receivable?
If the equal-risk opportunity cost of the investment in accounts receivable is 12%, what is the total opportunity cost of the investment in accounts receivable?