A firm is contemplating shortening its credit period from 40 to 30 days and believes that, as a result of this change, its average collection period will decline from 44 to 36 days. Bad-debt expenses are expected to decrease from 1.7 % to 1.1% of sales. The firm is currently selling 11,600 units but believes that as a result of the proposed change, sales will decline to 9,800 units. The sale price per unit is $ 54 and the variable cost per unit is $ 47. The firm has a required return on equal-risk investments of 11.5%. Evaluate this decision, and make a recommendation to the firm. (Note: Assume a 365-day year.)

a. The reduction in contribution from decline in sales is (round to the nearest dollar, enter as negative number)

b. The benefit from the reduced marginal investment in A/R is (round to the nearest dollar)

c. The cost savings from the reduction in bad debts is (round to the nearest dollar)

d. The net profit or loss from implementing the proposed plan is (round to the nearest dollar, enter as negative number for a loss)

e. Is the proposed plan recommended?