ABC Ltd sells $$120$ million of its products to wholesalers on terms of $$net $50.$

Currently, the firm$$s average collection period is $65$ days. In order to speed up the collection of receivables, JABC Ltd is considering offering a $1\%$ cash discount if customers pay their bills within $15$ days. The firm expects $40\%$ of its customers to take the discount and its average collection period to decline to $40$ days. The firm$$s required pretax return on receivables investment is $20\%.$ Determine

the net effect on ABC Ltd$$ pretax profits of offering a $1\%$ cash discount.