o estion Lengthening the credit period Parker Tool is considering lengthening its cred period from 30 to 60 days. All customers will continue to pay on the net care. The firm currently is $400,000 for sales and has $310,000 in varios The change in credit terms is expected to increase sales to $500,000. Bad-debt expenses will increase from 1% to 15% of sales. The firm has a required rate of retum on investment of 20%. Nessuna day year) a. What additional profit contribution from sales will be realized from the proposed change? b. What is the cost of the marginal investment in accounts receivable? c. What is the cost of the marginal bad debts? d. Do you recommend this change in credit terms