Power Inc. is considering shifting its credit terms from 3/15, n/30 to 4/10, n/30 in order to speed up collections. Currently, 30% of Power Inc.'s customers take the 3% discount, 35% pays on time; the rest on the 35th day. Under the new policy, 40% take the discount, half of the remaining customers pays on time while the rest pays 5 days after. More generous cash discount terms are expected to increase sales from P2,000,000 to P2,500,000 per year. Power Inc.' variable cost ratio is 60%, the interest rate on funds invested in accounts receivable is 3%, and the firm's income tax rate is 40%. Use 360 days/year.

What is the Days Sales Outstanding before the change in credit policy?

a)25

b)27.25

c)26.50

d)22.22