Fargo Memorial Hospital has annual net patient service revenues of $14.4 million. The hospital's patientaccounts manager estimates that 10 percent of third party payers pay on Day 30, 60 percent pay on Day 60,and 30 percent pay on Day 90.

a. What is Fargo's average collection period? (Assume 360 days per year throughout this problem.)Format is xx days.

b. What is the firm's current receivables balance?Format is $xxx,xxx

c. What would be the firm's new receivables balance if a newly proposed electronic claims system resultedin collecting from third-party payers in 45 and 75 days, instead of in 60 and 90 days?Format is $xxx,xxx

d. Suppose the firm's annual cost of carrying receivables was 10 percent. If the electronic claims systemcosts $30,000 a year to lease and operate, should it be adopted? (Assume that the entire receivablesbalance has to be financed.)