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Forrester Fashions has monthly credit sales of 23,000 units with an average collection period of 56 days. The company has a per-unit variable cost of

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Forrester Fashions has monthly credit sales of 23,000 units with an average collection period of 56 days. The company has a per-unit variable cost of 15 and a per-unit sale price of 25 . Bad debts currently are 6% of sales. The firm estimates that a proposed relaxation of credit standards would increase the average collection period to 84 days and would increase bad debts to 9% of sales, which would rise to 34,500 units per month. Forrester's cost of capital is 1.1% per month. Show all necessary calculations needed to evaluate Forrester's proposed relaxation of credit standards. (Note: Assume a 365-day year.) The additional profit contribution from an increase in sales is $ (Round to the nearest dollar.)

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