Karim Murshed, the new credit manager of the Bagdum Company, was alarmed to find that Bagdum sells on credit terms of net 80 days while industry-wide credit terms have recently been lowered to net 30 days. On annual credit sales of Tk.2.5 million, Bagdum currently averages 85 days of sales in accounts receivable. Current bad debt is 1 percent. Murshed estimates that tightening the credit terms to 30 days would reduce annual sales to Tk.2,475,000, but accounts receivable would drop to 35 days of sales and the savings on investment in them should more than overcome any loss in profit. Change in credit term would result in a reduction in bad debt by 50 percent. Bagdums variable cost ratio is 80%. If the interest rate on funds invested in receivables is 16%, should the change in credit terms be made?