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Question: Suppose Merrimack sells one million hardcover books a day at an average price of $37. Assume that its cost of production averages $23 a book. Merrimack has no beginning inventory, but it wants to have a three-day supply of books in ending inventory. Assume that operating expenses are $1 million per day.

Assuming Merrimack receives 70% of sales in cash the day of the sale and 30% in accounts receivable that is paid in the subsequent week, what is the company's budgeted cash collections from customers for the week if it had beginning Accounts receivable of $1.9 million?

A. $181.3 million

B. 1.33 million

C. $179.4 million

D. $183.2 million

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Accounting Basics, Accounting

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