Accounts receivable changes with bad debtsA firm is evaluating an accounts receivable change that would increase bad debts from 2% to 3% of sales. Sales are currently 30,000 units per month, the selling price is $20 per unit, and the variable cost per unit is $15. As a result of the proposed change, sales are forecast to increase to 70,000 units per month. If the cost of capital is 0.75% per month, should the firm change its credit policy?

a. The cost of the marginal bad debts of the firm is $?. (Round to the nearest dollar.)

b.

c.