Kim Mitchell, the new credit manager of the Vinson Corporation, was alarmed to find that Vinson sells on credit terms of net $90$ days while industry$-$wide credit terms have recently been lowered to net $30$ days. On annual credit sales of $$2\mathrm{.}53$ million, Vinson currently averages $95$ days of sales in accounts receivable. Mitchell estimates that tightening the credit terms to $30$ days would reduce annual sales to $$2,405,000,$ 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. Assume that Vinson$$s variable cost ratio is $63\%,$ taxes are $40\%,$ and the interest rate on funds invested in receivables is $21\%.$

The data has been collected in the Microsoft Excel Online file below. Open the spreadsheet and perform the required analysis to answer the questions above.

Open spreadsheet

Assuming a $365-$day year, calculate the net income under the current policy and the new policy. Do not round intermediate calculations. Round your answers to the nearest dollar.

Current policy: $ fill in the blank $2$

New policy: $ fill in the blank $3$

Should the change in credit terms be made?