How a company handles its credit accounts, including methods of invoicing and collecting past-due accounts, is indicated by the company's collection policy. Consider the case of Western Gas & Electric Co.: Western Gas & Electric Co.'s CFO has decided to take a closer look at the company's credit policy. Western Gas & Electric Co. has annual sales of $396.3 million, and it currently has an accounts receivable balance of $47.1 million. The first step in analyzing the firm's credit policy is to determine its days sales outstanding (DSO). Based on this information, what is Western Gas & Electric Co.'s DSO? (Note: Use 365 days as the length of a year in all calculations.) 39.1 days 30.4 days 41.2 days 43.4 days The average DSO for Western Gas & Electric Co.'s industry is 53.4 days. Assuming that its sales stayed the same, what would be Western Gas & Electric Co.'s receivables balance if it maintained the industry average DSO? Co.'s CFO thinks that the company has not done a very good job of enforcing its credit policy, if the company were to better enforce its credit policy, it would reduce its DSO to 30 days; however, this will cause Western Gas & Electric Co. to lose 6% of its sales revenue. What would Western Gas & Electric Co.'s expected accounts receivables balance be if it decides to tighten its credit policy? $33, 680, 064 $38, 272, 800 $27, 556, 416 $30, 618, 240