Fri company considers to change its credit terms from net 55 to net 30 to bring its terms in line with other firms in the industry. At present, annual sales are $360,000 at the average collection period of 62 days. Fri estimates tightening the credit terms will reduce the annual sales to $345,000, but accounts receivable would drop to 35 days of sales. Fri's variable cost ratio is 65 percent and its average cost of funds is percent. Should the change in credit terms be made? Assume all operating costs are paid at the time inventory is sold and all sales are collected at the DSO. Compute and interpret the results.