Lewis Enterprises is considering relaxing its credit standards to increase its currently sagging sales. As a result of the proposed relaxation, sales are expected to increase by 20%from14,000to16,800units during the coming year; the average collection period is expected to increase from30 to45days; and bad debts are expected to increase from2.5%to4.5%of sales. The sale price per unit is$ 38and the variable cost per unit is $ 26The firm's required return on equal-risk investments is 24.5%

Evaluate the proposed relaxation, and make a recommendation to the firm.

(Note:Assume a 365-day year.)

The additional profit contribution from an increase in sales is