Abudullah industries has sales of $120,000 and accounts receivable of $12,500, and It gives its customers 30 days to pay. The industry average DSO is 27 days, based on a 365 day year. If the company changes its credit and collection policy sufficiently to cause its DSO to fall to the industry average, and if It earns a 8% on any cash freed up by this change, how would that affect its net income, assuming other things are held constant?

1 $281.41

1. $289.86
2. 296.22
3. 311.81
4. 328.22