Cooper Office Supplies is considering a more liberal credit policy in order to increase sales. The following data is available for the company:
Uncollectable new accounts 8%
Collection costs (% of new sales) 6%
Production and selling costs 77%
Accounts receivable turnover 5
Income taxes 34%
Expected increase in sales $78,000 due to the liberal credit policy
a. What is the level of accounts receivable needed to support this sales expansion?