ent (18-5) RECEIVABLES INVESTMENT McDowell Industries sells on terms of 3/10, net 30. Total sales for the year are $912,500; 40% of the customers pay on the 10th day and take discounts, while the other 60% pay, on average, 40 days after their purchases. a. What is the days' sales outstanding? SHOW ANSWER b. What is the average amount of receivables? SHOW ANSWER c. What are the (i) nominal and (ii) effective percentage costs of trade credit if customers do not take the discount and pay in 30 days? SHOW ANSWER d. What are the (i) nominal and (ii) effective percentage costs of trade credit to customers who do not take the discount and pay in 40 days? SHOW ANSWER e. What would happen to McDowell's accounts receivable if it toughened up on its collection policy with the result that all nondiscount customers paid on the 30th day?