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14 July, 02:39

Dimon Products' sales are expected to be $5 million this year, with 90% on credit and 10% for cash. Sales are expected to grow at a stable, steady rate of 10% annually in the future. Dimon's accounts receivable balance will remain constant at the current level, because the 10% cash sales can be used to support the 10% growth rate, other things held constant. a. True. b. False.

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  1. 14 July, 03:54
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    given statement is false

    Explanation:

    increase in sale = 10 %

    so here total sale is

    sale = $5 million + 10%

    sale = $5.5 million

    and

    cash sale is

    cash sale = $5.5 million * 90%

    cash sale = $4.95 million

    so

    credit sale is here as

    credit sale = $5.5 million - $4.95 million

    credit sale = $0.55 million

    so here credit sale 0.5 million increased to 0.55 million

    so 10% increase

    hence regardless increase in cash sale is increase

    so given statement is false
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