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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?

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