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Dynamic Futon forecasts the following purchases from suppliers: Jan. Feb. Mar. Apr. May Jun. Value of goods ($ millions) 37 33 30 27 25 25 a. Sixty percent of goods are supplied cash-on-delivery. The remainder
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Dynamic Futon forecasts the following purchases from suppliers:

Jan. Feb. Mar. Apr. May Jun.
Value of goods ($ millions) 37 33 30 27 25 25
a. Sixty percent of goods are supplied cash-on-delivery. The remainder are paid with an average delay of 1 month. If Dynamic Futon starts the year with payables of $27 million, what is the forecasted level of payables for each month?
b. Suppose that, from the start of the year, the company stretches payables by paying 50% after 1 month and 20% after 2 months. (The remainder continue to be paid cash-on-delivery.) Recalculate payables for each month assuming that there are no cash penalties for late payment. Assume that Dynamic Futon didn't have any payable balance at the start of the year.

User Ivania
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Answer:

Please find the complete solution in the attached file.

Step-by-step explanation:

Dynamic Futon forecasts the following purchases from suppliers: Jan. Feb. Mar. Apr-example-1
User Vladik Branevich
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