7. A firm has current sales of 720,000. It is considering offering the credit terms "2/10, net 30" instead of "net 30." It is expected that sales will increase by 20,000 and the average collection period will reduce from 30 days to 20 days. It is also expected that 50 per cent of the customers will take discounts and pay on 10th day and remaining 50 per cent will pay on 30th day. Bad-debt losses will remain at 2 per cent of sales. The firm's variable cost ratio is 70 per cent, corporate tax rate is 50 per cent and opportunity cost of investment in receivables is 10 per cent. Should the company change its credit terms?