Evolution Charging Corp (ECC) currently sells all of its charging stations on credit with terms 2/10, net 30. ECC has a contribution margin of 25.00% and a gross profit percentage of 60.00%. Its short-term borrowing rate is 5.00% after tax.
Here are some more specifics related to the offering of credit terms:
	Current average collection days	15.00	days
	% currently taking the discount	84.00%
	Forecasted sales with current credit terms	$ 2,550,000
	Bad debt expense as a % of sales	2.00%
ECC is contemplating changing its credit terms to 3/10, net 60 to enhance sales. Here is some data related to the new credit terms being contemplated:
	Forecasted average collection days	32.00	days
	% that would take advantage of the discount	63.00%
	Forecasted sales with new credit terms	$ 3,550,000
	Forecasted bad debt expense as a % of sales	3.00%
Required (make sure you show your work):
	Should ECC offer credit terms going forward? What is the estimated annual impact on operating profits. of the decision to offer the new credit terms? Ignore taxes and assume that any impact to working capital will need to be financed with their line of credit (negative impact will require additional financing and positive impact will be used to pay down the line of credit).