Question: Problem 6. KATE Co. is planning to introduce changes in its collection procedures. The new procedures are expected to make the collection period longer by

Problem 6. KATE Co. is planning to introduce changes in its collection procedures. The new procedures are expected to make the collection period longer by 10 days, although there will be no change in bad debts. For the coming year, KATE Co.'s budgeted sales is P32 400 000 or P90 000 per day. Short-term interest rates are expected to average at 9% per annum. a. As a result of the changes in collection procedures, KATE Co.'s average AR balance will increase {decrease} by? b. To make the changes in collection procedures cost-benecial, the minimum savings in collection costs for the coming year should be

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