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Fizzy Animators, Inc. currently makes all sales on credit and offers no cash discount. The firm is considering a 2 percent cash discount for payment

Fizzy Animators, Inc. currently makes all sales on credit and offers no cash discount. The firm is considering a 2 percent cash discount for payment within 10 days. The firm's current average collection period is 90 days, sales are 400 films per year, selling price is $25,000 per film, variable cost per film is $15,000(note the variable cost % is 60%). The firm expects that the change in credit terms will result in an increase in sales of 20 films per year, that 80 percent of the sales will take the discount, and the average collection period will drop to 30 days. The firm's required return on equal-risk investments is 10 percent. (Assume a 360-day year.)
What is the firm's marginal contribution margin from sales under the proposed plan of initiating the cash discount?
Group of answer choices
$200,000
$100,000
$62,500
$500,000

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