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Drake Paper Company sells on terms of net 30. The firm's variable cost ratio is 0.90. Assume there are 365 days per year. Round your

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Drake Paper Company sells on terms of "net 30." The firm's variable cost ratio is 0.90. Assume there are 365 days per year. Round your answers to the nearest dollar. Enter your answers in whole dollars. For example, an answer of $1.20 million should be entered as 1,200,000, not 1.20. a. If annual credit sales are $25 million and its accounts receivable average 12 days overdue, what is Drake's investment in receivables? $ b. Suppose that, as the result of a recession, annual credit sales decline by 30 percent to $17.5 million, and customers delay their payments to an average of 21 days past the due date. What will be Drake's new level of receivables investment? $

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