Canadian Drums Inc does not currently extend credit to their customers. They manufacture drum sets and sell them to specialty retailers in Canada and the USA Last year the company sold 2,500 drum sets at a price of $150.00 per drum set. The company is considering offering new credit terms of net 60 days to all customers to drive sales. They belleve the competitive advantage of this new policy would allow Canadlan Drums Inc to increase the selling price of their product by $15.00 per unit and increase sales by 180 units per year. Variable costs are expected to remain at $90 per unit and bad debt expense will be 10 percent of total sales per year. (Note the wording here. Total Contribution Margin will go up for two reasons. First, there will be a price increase on the existing 2,500 drum sets being sold. Second, there will be an additional 180 drum sets sold at the new price. Perform your analysis on total sales and total contribution margin, not just the change in sales volume.) South American Drums Inc expects all customers will take advantage of the new terms (I.e., they will all pay Apollo Inc 60 days after a sale is recorded). So, for the first time in the company's history they will have an accounts recelvable balance in current assets and a bad-debt expense. The increase in sales will also mean an increase in the inventory they hold. Inventory is currently sitting at $480,000 and is expected to increase by 25.0 percent. The firm will finance the additional investment in working capital by using a line of credit (bank loan) which charges 12.0 percent interest per year. Required: a. Calculate the increase in current assets and the costs to finance that increase: b. Calculate the impact of changing the credit policy on cor/sibution margin: c. Calculate the net impact of changing the credit policy: d. Would you offer the new credit terms? (Yes/No) a. Calculate the increase in current assets and the costs to finance that increase. (ontar all numbers as whole numburs). b. Calculate the impact of changing the credit policy on contribution margin: c. Calculate the net impact of changing the credit policy: d Would you offer the new credit terms? (Yes/No)