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Garcia Industries has sales of $200,000 and accounts receivable of $18,500, and it gives its...

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Finance

  1. Garcia Industries has sales of $200,000 and accounts receivable of $18,500, and it gives its customers 25 days topay. The industry average DSO is 27 days, based on a 365-day year. If the company changes its credit andcollection policy sufficiently to cause its DSO to fall to the industry average, and if it earns 8.0% on any cash freed-up by this change, how would that affect its net income, assuming other things are held constant?

a. $241.45

b. $254.16

c. $267.54

d. $296.44

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