Mercury LLP does not currently extend credit to their customers. They manufacture guitars and sell them to specialtyreters in Canada. Last year the company sold 700 guitars at a price of $180.00 per guitar The company is considering offering new credit terms of net 30 days to all customers to deve es. They bebeve the competitive advantage this new policy would provide would allow Mercury LLP to increase the selling price of their product by $10.00 per un and Increasing sales by 90 units per year. Variable costs are expected to remain at $31000 per unit and bad debt expense will be $5.000 per year. Note the wording here Total Contribution Marginwg up for a reasons Five will be a person the 700 gram sold Second, there will be an actionar 90 guitars old at me new price for your analyse on totes and to control the chare in salos volume) Mercury LLP expects that all customers will take advantage of the new terms, they will all pay Mercury LLP 30 days wfter sales recorded). So, for the first time in the company's history they will have an accounts receivable balance in current assets and a bad debt expense. The increase in sales will also man an increase in the inventory they hold Inventory is currently sitting at $498,000 and is expected to increase by 20 percent. The firm will finance the additional investment in working capita by using a me of credit bank loans which charges 9 percent interest per war Required: A Calculate the crease in current assets and the costa finance that increases DO Description New Old Difference S NA ACOUS Reivable Inventory Gureets cent Rectang the credit policy on contribution matcm Current assels Bank Interest costs Difference B. Calculate the impact of changing the credit policy on contribution margin: Description New Old enter at numbers as positive) Sales Variable Exp Contribution Margin A C. Calculate the net impact of changing the credit policy. Impact S Description Increase in contribution margin center as a posive number Increase in bad debts center is a negative numben Bank interest cost tendera negative number Nel change contar as negative number of the amount is de transero) D Would you offer the new credit terms? (Click to select)