5. Accounts Receivable Policy Trout Ltd has annual credit sales of $40 million and 3 percent of the value of these sales h written o as bad debt. Currently Trout's credit terms are 515 net 30; and ED percent of defaulting credit customers take advantage of the discount. is further 3D percent of non pay on time and the remaining 1t] percent of nondefaulters pay 15 days late. The nancial team at Trout Ltd are considering changing the firm's credit terms to Lilli], is expected that 1D percent of nondefaulting credit customers will take advantage of the discounc but that the percentage of nondefaulting customers paying on time without coll discountwill rise to EU while ll] percent will now pay 2|] days late. The change should increase credit sales. to $43 million per year, but it is also expected bad debts to 6 per cent of this total credit sales figure. The existing administrative cost of pursuing slow payers is expected to inm'ease from th $1 to $250,0[il]. Trout's opportunity cost of funds is 12 percent, its variable cost ra and its average tar-r rate is 3|] percent. Where appropriate, please use a BEDday year. guired: {a} Performing any intermediate calculations you consider necessary {and labe ' please estimate the percentage change in forecasted prot that shifting from the new policywiil bring about. {Please be accurate to these decimal places: 31.3% or Ems] ( (b) If you were a member of the financial team at Trout Ltd, please explain what chan you make to the proposed new policy and w you would make them. [No new c are necessary your calculations from part [a] should provide sufcient numeric for your arguments here] TDTAL: 15