Merva Manufacturing sells on terms of 3/10, net 30. Total sales for the year are $3,250,000. Thirty-five percent of customers pay on the 10th day and take discounts; the other 65% pay, on average, 42 days after their purchases.

a. What is the days sales outstanding?

b. What is the average amount of receivables?

c. What would happen to average receivables if Merva toughened its collection policy with the result that all nondiscount customers paid on the 32th day?