DPB Ltd, manufactures drum sets and sells them to specialty retailers in Canada. Last year the company sold 600 drum sets at a price of $380.00 per drum set. The company does not currently extend credit, although it is considering offering new credit terms of net 30 days to all customers. They believe this will provided DPB Ltd, with an advantage over their competition, thereby increasing the selling price of their product by $10.00 per unit and increasing sales by 90 units per year. Variable costs are expected to remain at $310.00 per unit and bad debt expense will be $4,000 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 600 drum sets being sold Second, there will be an additional 90 drum sets sold at the new price. Perform your analysis on total sales and total contribution margin, not just the new volume of sales) DPB Ltd. expects that all customers will take advantage of the new terms. (.e. they will all pay DPB Ltd. 30 days after a sale is recorded.) So, for the first time in the company's history they will have an accounts receivable balance in current assets. The increase in sales will also mean an increase in the inventory they hold. Inventory is currently sitting at $525,000 and is expected to increase by 20 percent. The firm will finance the additional investment in working capital by using a line of credit (bank loan) which charges 10 percent interest per year. Required: a. Calculate the increase in current assets what will need to be financed. (Round all final answers to zero decimal places. Enter all numbers as positive) Old SO accounts Receivable Inventory 525,000 Current Assets $ 525,000 b. Calculate the impact of changing the credit policy. (Round all final answers to zero decimal places. Enter all numbers as positive.) Increase Sales Variable costs Contribution margin Bad Debts Interest costs on increase in current assets Incremental Change c. Would you offer the new credit terms? (Click to select)