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Accounts receivable changes Tara's Textiles currently has credit sales of $28 million per month, an average collection period of 64 days, and bad debts equal to 3.5% of sales. Assume that the price of Tara's products is $55 per unit and that the variable costs are $50 per unit. The firm is considering tightening up their credit policy, allowing customers 30 days rather than 64 to pay their bills. With a stricter credit policy in place, sales will fall by 10%, but the average collection period will drop to 30 days and the bad debts percentage will fall to 1%. Determine whether the company should make this change if their cost of capital is 1.0% per month. (Note: Use a 365-day year.) The cost from a decrease in sales is $ (Round to the nearest dollar.) Accounts receivable changes Tara's Textiles currently has credit sales of $28 million per month, an average collection period of 64 days, and bad debts equal to 3.5% of sales. Assume that the price of Tara's products is $55 per unit and that the variable costs are $50 per unit. The firm is considering tightening up their credit policy, allowing customers 30 days rather than 64 to pay their bills. With a stricter credit policy in place, sales will fall by 10%, but the average collection period will drop to 30 days and the bad debts percentage will fall to 1%. Determine whether the company should make this change if their cost of capital is 1.0% per month. (Note: Use a 365-day year.) The cost from a decrease in sales is $ (Round to the nearest dollar.)