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MC$.04\mathrm{.}098.$Algo

Ouestion $9$ of $42$

Garcia Industries has sales of $$160,000$ and accounts receivable of $$20,500$ and it gives its customers $25$ days to pay. The industry average DSO is $27$ days, based on a $365$ day vear. If the company changes its credit and collection policy sufficiently to caise its DSO to fall to the industry average, and if it eams $7\mathrm{.}0\%$ on any cash freed$-$up by this change, by how much would its net income increase, assuming other things are held constant? Assume all sales to be on credit Do not round vour intermiriate calculations.

a$.576712$

b$.5667\mathrm{.}88$