Essence of Skunk Fragrances, Ltd., sells 5,500 units of its perfume collection each year at a price per unit of $385. All sales are on credit with terms of 3/20, net 40. The discount is taken by 45 percent of the customers.

a.What is the amount of the company's accounts receivable?

b.In reaction to sales by its main competitor, Sewage Spray, Essence of Skunk is considering a change in its credit policy to terms of 5/20, net 40 to preserve its market share. Will this change in policy increase or decreaseaccounts receivable?