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Question about finance/ forecasting payments

1. If a firm pays its bills with a 30 day delay, what fraction of its purchases will be paid for in the current quarter? in the following quarter? what if its payment delay is 60 days?

I get the if it was 60 days it would double. What I don't understand is how to figure out the fraction.

Solution Preview

If a firm pays its bills with a 30 day delay, that means that if a company buys something on Feb 28, then they pay for it on March 30th and so on...

Now let us assume it is the first quarter of the year. Company buys on Jan 1, pays on Jan 31. Company buys on Jan 2, pays on Feb 1. This continues till March 1. Company ...

Solution Summary

This solution talks about accounts payable and estimates the number of days it would take to pay its bills.

$2.19