A campany with annual sales of 524,000,000 is considering changing its pwyment ternat from ast 40 to net 30 to encourage customers to pay more peompely. The company forecasts that cuastomen woeld respond by peying on day 34 rather than day 44 as at present (assume a 360 day year) but would decrease their purctases by 5450000 per yeac. The company alse forecasts that its idle cash balance would decrease by 540,000 and adrinistrative costs would be tedsced by $35,000 per year. The company's variable costs average 66% of sales, it is in the 35% marginal tax tracket, and it has an 9% cost of capital. Your answers to this open-ended assignment should be placed in the space below this line. New daily sales Change in average age of A/R (days) Contribution margin % Change in A/R based on profit portion Ouber WiC change (given in problem) Change in administrative costs (given in problem) Decrease in sales Contribution margin % Net decrease in contribution margin Change in admin cosis (from above) Change in contribution margin (from above) Net taxable change Tax rate Net change in taxes B Present value of cash inflows Present value of cash outflows Net present value C. Annual cash outflow Investment in AM Interaal rate of return D Allowed annual cost Actual ansual cost Net annual benefit E Double click and put your answer here. A company with annual sales of 524,600,000 is considering changing its payment terms frem net 40 to net 30 to enconatuge custceners to pay mere prompely. The company forecasts that customers would respoed by payisg on day 34 rather than clay as at present (asame a 360 day year) but would decrease their purchases by $450,000 por yeat. The company also fatecasts that its idle cach balance would dectease by $40,000 and administrative coess would be reduced by $35,000 per year. The Rewinods Your answers to this open-ended assignment should be placed in the space below this line. Detailed napgert for abye nesmbers: Daily suln Average +ig of Ak ifyyi Variable iust \$5 old imestiment in AR Neu daily ales Nerage ige of AR Itays) Yariable and \%! Nau imatmat in 1 Net decense in A/ tuluse New duily ales thange is aserap ays of A R rapo? Cometesiar mogin % Change is A.R based un profi pertion Other Wre chaege igivet in powilari) Change se adminisinaene coubs igvas in futhion) Decreasen at saks Careritediat maegits Net dectare in cotritutire magin Change is atmin cees i from sheve) Chante it contributien murgit (futt above) Net tavele charee lis rim Nat cheng is iaxes B Pracen valiet ef caph ieflews Net greent value C. Mrawil cuat witter Investrict in ARR Inomal ate of retum D) Allewod intual cind Ahetiel witwat cuel Nei areaul benefit E Douthe ciak and pat yow atwwe lete