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QUESTION
Ingraham Inc. currently has $430,000 in accounts receivable, and its days sales outstanding (DSO) is 41 days.
Ingraham Inc. currently has $430,000 in accounts receivable, and its days sales outstanding (DSO) is 41 days. It wants to reduce its DSO to 20 days by pressuring more of its customers to pay their bills on time. If this policy is adopted, the company's average sales will fall by 20%. What will be the level of accounts receivable following the change? Assume a 365-day year.
