1.

Data on Nathan Enterprises for the most recent year are shown below, along with the days sales outstanding of the firms against which it benchmarks. The firm's new CFO believes that the company could reduce its receivables enough to reduce its DSO to the benchmarks' average. If this were done, by how much would receivables decline? Use a 365-day year.

Sales	$110,000
Accounts receivable	$16,000
Days sales outstanding (DSO)	53.09
Benchmark days sales outstanding (DSO)	20.00

a. $8,078

b. $8,975

c. $10,970

d. $9,973

e. $12,067

Newsome Inc. buys on terms of 3/15, net 45. It does not take the discount, and it generally pays after 60 days. What is the nominal annual percentage cost of its non-free trade credit, based on a 365-day year?

a. 25.09%

b. 33.39%

c. 30.35%

d. 36.73%

e. 27.59%