The AFN equation and the financial statement-forecasting approach both assume that assets grow at relatively the same rate as sales. However, the relationship between assets and sales is often a little more difficult than that. In particular, some firms use regression analysis to predict the required assets needed to support a given level of sales. General Services Corp. has used its historical sales and asset data to estimate the following regression equations: General Services Corp. currenty has sales of $984,000, but it expects sales to grow by 20% over the next year. Use the regression modeis to calculate General Services Corpis forecasted values for accounts recelvable and inventories needed to support next year's sales. Based on the next year's accounts receivable and inventory levels predicted by General Services Corpi's regression equations, the firm's DSO for next year is expected to be - Use 365 days as the length of a year in all calculations