uth Company currently has $1,000,000 in accounts receivable. Its days sales outstanding (DSO) is 40 days (based on a 365-day year). Assume a 365-day year.

How much is the Ruth's current annual sales revenue?

		$8,225,000
		$8,500,000
		$8,875,000
		$9,000,000
		$9,125,000

The company wants to reduce its DSO to the industry average of 25 days by pressuring more of its customers to pay their bills on time. The company's CFO estimates that if this policy is adopted the company's average sales will fall by 10 percent. Assuming that the company adopts this change and succeeds in reducing its DSO to 25 days and does lose 10 percent of its sales, what will be the level of A/R following the change?

		$500,000
		$525,000
		$562,500
		$625,000
		$675,500