1 510 Relaxation of credit standards Farmers World, a rm specializing in fertilizers, is evaluating a proposal to relax the credit standards to increase sales. The implemen- tation of the proposed plan is expected to result in an increase of 10% in sales, from 15,500 to 17,050 units for the following year. The average collection period will in- crease from 30 to 45 days, and bad debts are expected to increase from 2% to 5 '34: of sales- The selling price per bag is $15, and the variable cost per bag is $12. The required rate of return on equal-risk invesllnents is 22%. Should the proposed plan be implemented? Explain. (Note: Use a SEE-day year.)