Major Electronics sells 85,000 personal stereos each year at a price per unit of \($55.\) All sales are on credit; the terms are 3/15, net 40. The discount is taken by 40 percent of the customers. What is the investment in accounts receivable?

In reaction to a competitor, Major Electronics is considering changing its credit terms to 5/15, net 40, to preserve its sales level. Describe qualitatively how this policy change will affect the company’s investment in accounts receivable.