O higher 14. Forrester Fashions has annual credit sales of 270,000 units with an average collection period of 72 days. The company has a per unit variable cost of $15 and a per-unit sale price of $22.50. Bad debts currently are 5.5% of sales. The firm estimates that a proposed relaxation of credit standards would not affect its 72-day average collection period but would increase bad debts to 8.25% of sales, which would increase to 324,000 units per year. Forrester requires a 10% return on investments. Show all necessary calculations required to evaluate Forrester's proposed relaxation of credit standards. (Note: Assume a 365 day year.) The additional profit contribution from an increase in sales is $ (Round to the nearest dollar.) The cost from the increased marginal investment in A/R is $ (Round to the nearest dollar) The cost from the increase in bad debts is $ (Round to the nearest dollar) The net profit or loss from implementing the proposed plan is $ (Round to the nearest dollar. Enter a negative number for a loss.) Is the proposed plan recommended? (1) (Select from the drop-down menu.) (1) O No O Yes 15. Accounts receivable changes with bad debts A firm is evaluating an accounts receivable change that would increase bad debts from 2% to 4% of sales. Sales are currently 40,000 units, the selling price is $20 per unit, and the variable cost per unit is $15. As a result of the proposed change, sales are forecast to increase to 70,000 units earch e os w