Dizzy Animators, Inc. currently makes all sales on credit and offers no cash discount. The firm is considering a 3 % cash discount for payment within 10 days. The firm's current average collection period is 90 days, sales are 500 films per year, selling price is P 25,000 per film, variable cost per film is P 18,000 per film, and the average cost per film is P 21,000. The firm expects that the change in credit terms will result in a minor increase in sales of 10 films per year, that 70 % of the sales will take the discount, and the average collection period will drop to 30 days. The bad debt expense is currently 1.5% of sales. Under the proposal, bad debts will decrease to 0.5%. The firm's required return on equal-risk investments is 12 %.(use 360day)

1.What is the firm's marginal profit contribution from sales under the proposed plan of initiating the cash discount?_____________

2.What is the marginal investment in accounts receivable under the proposed plan? __

3.What is the cost of marginal investment in accounts receivable under the proposed plan? _____________________

4.What are the savings of marginal bad debts under the proposed plan? ___________

5.What is the cost of the marginal cash discount?_______________

6.What is the net result of increasing the cash discount? ________________