An Entrepreneur Who Is Considering Purchasing a Business Is Analyzing

Multiple Choice

An entrepreneur who is considering purchasing a business is analyzing a company's accounts receivable. The following table summarizes her findings. Age of Accounts Amount Probability of Collection
0 - 30 days $12,000 .96
31 - 60 days $ 4,000 .87
61 - 90 days $ 2,500 .71
91 - 120 days $ 1,400 .65
121⁺ days $ 800 .24
How much should this potential buyer be willing to pay for these accounts receivable?

A) Nothing; a buyer should never purchase existing accounts receivable.
B) $20,700
C) $17,877
D) Not enough information given to determine