EXERCISE 8: EFFECTS OF CHANGES IN CREDIT TERMS ON RECEIVABLES

QRX Corp. is Currently selling its products on fifteen (15) days charge basis. Annual sales amount to 390,000. The sales manage suggests that the term of sales be prrolonged to twenty-one (21) days to increase sales by 40%

Required:

Estimated change in the amount of average accounts receivable based on the extension being negotiated for.

Please show and explain solution/answer.