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    Factors Influencing The Receivables Level

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    40. A company's investment in receivables is influenced by several variables, including:

    A. The level of sales.

    B. The nature of the product or service sold.

    C. The credit and collection policies.

    D. All of these are correct.

    © BrainMass Inc. brainmass.com December 24, 2021, 8:13 pm ad1c9bdddf
    https://brainmass.com/business/receivables/factors-influencing-receivables-level-257782

    SOLUTION This solution is FREE courtesy of BrainMass!

    A company's investment in receivables is influenced by the level of sales; if the investment tends to run at a set percentage, the greater the volume of sales, the greater the investment will be. Likewise, it is influenced by the nature of the product or service sold. If the company sells goods that are usually paid for by cash, such as candy and newspapers, the company will have no investment in receivables. However, if it sells building supplies for commercial projects or large IT systems, it will carry a significant amount of receivables. Finally, it is influenced by the credit and collection policies. If the company is lax in collecting receivables, or extends credit to slow payers, it will invest a greater amount in receivables than if it collects amounts due rapidly. Therefore, answer D. All of these are correct, is the correct answer.

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    © BrainMass Inc. brainmass.com December 24, 2021, 8:13 pm ad1c9bdddf>
    https://brainmass.com/business/receivables/factors-influencing-receivables-level-257782

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