Taiwan Electronic Company sells on terms of “net 30.” Annual credit sales are

$54.75 million, and its accounts receivable average 10 days overdue.

a. Determine Taiwan Electronic Company’s investment in receivables.

b. Suppose that, as the result of a recession, annual credit sales decline by 15 percent and customers delay their payments to an average of 25 days past due.

Determine the company’s new level of receivables investment.