Gardner company currently makes all sales on credit and offers no cash discount. the firm is considering offering a 1% cash discount for payment within 30 days. the firms current average collection period is 60 days, sales are 40,000 units, selling price is $47 per unit and variable cost per unit is $33. The firm expects that the change in credit terms will result in an increase in sales to 43,000 units, that 70% of the customers (and 70%of the dollar volume of sales) will take the discount and pay on day 30, and the other customers will continue to pay the full invoice on day 60. The company's cost of capital is 0.5% per month. Should it offer the discount? (Note: Assume a 365-day year.)

(a) the additional profit contribution from additional sales is $______

(b) the amount of cost that will be saved due to the reduction in average A/R is $_______

(c) the cost of extending the cash discount to customer is $______

(d) the net profit from the proposed cash discount is $______

Should the proposed cash discount be offered? Yes or No