ABC enterprise is considering changing its credit terms from net 30 to 2/10 net 30.The current Average Collection period(ACP) is 40 days,which includes receiving,processing and collecting payments once the invoices are mailed. the firm expects the change to result in an ACP of 25 days.

Current sales of ABC's product is 1100 units at a price of RM 3000 each. The variable cost per unit is RM 2300.The firm expects 80% of its customers to take the 2% discount,resulting in an increase in sales of 50 units. The bad debt % is expected to remain the same. The opportunity cost of funds invested in AR is 14%.

Should ABC enterprise offer the proposed cash discount?