Milwaukee Surgical Supplies, Inc., sells on terms of 3/10, net 30.

Calculate the firm’s average collection period. Calculate the firm’s current receivables balance. Calculate the firm’s new receivables balance if Milwaukee Surgical toughened up on its collection policy, with the result that all non-discount customers paid on the 30th day. Assuming the cost to the firm to carry receivables is 8% per annum; calculate the annual savings resulting from the toughened credit policy. (Assume the entire amount of receivables had to be financed.)