Initiating a cash discount Gardner Company currently makes all sales on credit and offers no cash discount. The firm is considering offering a 4% cash discount for payment within 15 days. The firm's current average collection period is 60 days, sales are 40,000 units, selling price is $47 per unit, and variable cost per unit is $31. The firm expects that the change in credit terms will result in an increase in sales to 44,000 units, that 70% of the sales will take the discount, and that the average collection period will fall to 30 days. If the firm's required rate of retum on equal-risk investments is 25%, should the proposed discount be offered? (Note: Assume a 365-day year.) The additional profit contribution from additional sales is $ . (Round to the nearest dollar) The amount of cost that will be saved due to the reduction in average A/R is $ (Round to the nearest dollar.) The cost of extending the cash discount to customer is (Round to the nearest dollar.) The net profit from the proposed cash discount is $ (Round to the nearest dollar.) Should the proposed cash discount be offered? (Select the best answer below.) Yes o No