Historical Revenues - $34,000,000

Forecast Total Revenues - revised customer base - $50,000,000

Next year credit terms - all sales - from current of 35 days to 45 days

Revised forecast collection days - all sales - from current of 12 times to forecast 6 times

Historical gross profit percentage earned 32% - all revenues

Forecast gross profit - revised product offering - 28% all revenues

Historical bad debt percentage - 5% on all historical revenues

Expected bad debt percentage to increase to 4.0% on revised total forecast revenue

Cost of capital - 13%

Bank direct deposit fee - $2000 per month

Additional administrative savings - per month - $1,400

Inventory levels increase by $600,000 to support new revenues

Trade payables increase $300,000 due to increased inventory

a) Prepare a schedule which summarizes the benefits versus costs of this plan and write a conclusion as to whether or not this plan is financially acceptable. Show all calculations.