Carlyle Foundries would like to improve its collections of accounts receivable. They are planning on changing their credit policy from net 45 to 22/15, net 45. They believe that 6161% of customers will take advantage of the discount, reducing the average collection period from the current 5555 days to an expected 3030 days. Carlyle expects that the new discount will increase sales from the current $1,700,0001,700,000 to $2,200,0002,200,000. Their profit margin will remain at 88%. The company can generate a return of 88% on any cash freed up. Should the company adopt the policy? Support your answer by calculating the below.

Round below answers to nearest whole number (e.g. 1,355). If your answer is an increase to net income, enter it as a positive. If your answer is a decrease to net income, enter it as a negative using a negative sign.

A) New Accounts Receivable: $Answer

B) Old Accounts Receivable: $Answer

C) What is the change in cash flow that will result from the above change in a/r? $Answer

D) What is the change in net income due to the change of cash flow only (i.e. return on investment: $Answer

E) What is the change in net income due to the change in sales only? $Answer

F) What is the change in net income due to the discount only? $Answer

F) What is the total change in net income related to the change in policies? $Answer

G) Based on your answer to Part F, which policy would you choose? Type "O" for the old policy or "N" for the new policy. Answer