Minnerly Motors wants to tighten its credit policy. On annual credit sales of $6.5 million, Minnerly Motors currently averages 85 days of sales in accounts receivable. The CFO estimates that tightening the credit terms from net 70 to net 30 would reduce annual sales by 10%, but DSO would drop to 35 days and the savings on investment in them should more than overcome any loss in profit. Minnerly Motors variable cost ratio is 85%. If the interest rate on funds invested in receivables is 16%, should the change in credit terms be made? Calculate the impact of the credit policy change on the pre-tax profit of the firm to justify your decision.