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Ethan Industries has sales of $ 2 0 0 , 0 0 0 and accounts receivable of $ 1 6 , 0 0 0 ,
Ethan Industries has sales of $ and accounts receivable of $ and it gives its customers days to pay. The industry average DSO is days, based on a 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 on any cash freedup by this change, how would that affect its net income, assuming other things are held constant?
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