ABC Industries has credit sales of $155 million a year. ABC management reviewed its credit policy and decided that it wants to maintain an average collection period of 45 days.

What is the maximum level of accounts receivable that ABC can carry and have a 45-day average collectionperiod?

If current accounts receivable collection period is 50 days, how much would it have to reduce its level of accounts receivable in order to achieve its goal of 45 days?