Answer:
DSO = 365 days * Accounts Receivable / Sales
75 = 365 * $810,000 / Sales
Sales = 365 * $810,000 / 75
Sales = $3,942,000
New Sales = Current Sales – Current Sales *10%
New Sales = $3,942,000 - $3,942,000 * 10%
New Sales = $3,942,000 - $394,200
New Sales = $3,547,800
Target DSO = 365 days * Accounts Receivable / New Sales
30 = 365 * Accounts Receivable / $3,547,800
Accounts Receivable = 30 * $3,547,800 / 365
Accounts Receivable = $291,600
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