2. Accounts receivable Effective credit management involves establishing credit standards for extending credit to customers, determining the company's credit terms, and setting up procedures for invoicing and collecting past-due accounts. The following statement refers to a credit management policy. Select the best term to complete the sentence. The minimum financial strength a customer must have to be granted credit is indicated by the company's Consider the case of Stowe-Arts Holdings Co.: Stowe-Arts Holdings Co.'s CFO has decided to take a closer look at the company's credit policy. Stowe-Arts Holdings Co. has annual sales of $379.3 million, and it currently has an accounts receivable balance of $47.1 million. The first step in analyzing the firm's credit policy is to determine its days sales outstanding (DSO). Based on this information, Stowe-Arts Holdings Co.'s DSO is (Note: Use 365 days as the length of a year in all calculations.) The average DSO for Stowe-Arts Holdings Co.'s industry is 53.4 days. Assuming that its sales stayed the same, what would be Stowe-Arts Holdings Co.'s receivables balance if it maintained the industry average DSO? Stowe-Arts Holdings Co.'s CFO thinks that the company has not done a very good job of enforcing its credit policy. The CFO believes that if the company were to better enforce its credit policy, it would reduce its DSO to 30 days; however, this will cause Stowe-Arts Holdings Co. to lose 4% of its sales revenue. What would Stowe-Arts Holdings Co.'s expected accounts receivables balance be if it decides to tighten its credit policy? O $26,935,497 $37,410,413 $29,928,330