Data on Wentz Inc. for 2008 are shown below, along with the payables deferral period (PDP) for the
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Question
Data on Wentz Inc. for 2008 are shown below, along with the
payables deferral period (PDP) for the firms against which it
benchmarks. The firm's new CFO believes that the company could
delay payments enough to increase its PDP to the benchmarks'
average. If this were done, by how much would payables increase?
Use a 365-day year.
Cost of goods sold = $70,000
Payables = $5,000
Payables Deferral Period (PDP) = 26.07
Benchmark Payables Deferral Period = 30.00
Cost of goods sold = $70,000
Payables = $5,000
Payables Deferral Period (PDP) = 26.07
Benchmark Payables Deferral Period = 30.00
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