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Essence of Skunk Fragrances, Ltd., sells 5,600 units of its perfume collection each year at a price per unit of $386. All sales are on credit with terms of 1/25, net 60. The discount is taken by 40 percent of the customers.

What is the amount of the company’s accounts receivable? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.)

Average receivables            $

In reaction to sales by its main competitor, Sewage Spray, Essence of Skunk is considering a change in its credit policy to terms of 3/25, net 60 to preserve its market share. Will this change in policy increase or decrease accounts receivable?

(Click to select)DecreaseIncrease

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