Open wreadsheet Currech policyts Q Nhin polkyt 1 Whould the enempe in ovedit terms be inabe? Tiphtening Credit Terms \begin{tabular}{|c|c|} \hline Firmite current oredit inms, net & 90 \\ \hline Indusiry-wide creda termis, net. & 30 \\ \hline Discounts & $0 \\ \hline Bad Debi Losses & 50 \\ \hline Fim's variable oost ratio & 73.00% \\ \hline Taxpete. & 40.00% \\ \hline Inlerest rale on funds invested in recelvables & 25.00% \\ \hline Deys in yeat. & 365 \\ \hline \end{tabular} \begin{tabular}{l} Current Crodi Paficy: \\ Amual croda sales \\ Days saies outstandina, DSO \\ \hline 2,710,000 \\ \hline 95 days \end{tabular} \begin{tabular}{|c|c|} \hline \begin{tabular}{l} Now Crodit Policy, Totiten to \\ Industry-Average Credit Tems: \end{tabular} & \\ \hline Arnual credit sales & $2,555,000 \\ \hline Days sales outatanding DSO & 35 \\ \hline \end{tabular} \begin{tabular}{|c|c|c|c|} \hline Changing Credil Policy Analysis: & \begin{tabular}{l} Projected Income \\ Statement Under \\ Current Credat Policy \end{tabular} & \begin{tabular}{c} Eflect of \\ Credit Policy \\ Change \\ \end{tabular} & \begin{tabular}{l} Projeced Income \\ Statement Under Now \\ Credit Pollicy \\ \end{tabular} \\ \hline Gross sales & $2,710,000 & $125,000 & $2,585,000 \\ \hline \multicolumn{4}{|l|}{ Discounts } \\ \hline \multirow{2}{*}{\multicolumn{4}{|c|}{\begin{tabular}{l} Net sales \\ Variable costs \end{tabular}}} \\ \hline & & & \\ \hline \multicolumn{4}{|l|}{\begin{tabular}{l} Variabio costs \\ Profit belore credit conts and taxes \end{tabular}} \\ \hline \multicolumn{4}{|l|}{ Crodil-folated conts: } \\ \hline \multicolumn{4}{|l|}{ Cost of camving receivables } \\ \hline Bad debt losses: & 0 & 0 & 0 \\ \hline \multicolumn{4}{|l|}{ Profit belore taxes } \\ \hline \multicolumn{4}{|l|}{ Taxes } \\ \hline \multicolumn{4}{|l|}{ Net income } \\ \hline \multicolumn{4}{|l|}{ Should the change in credit terms be made? } \\ \hline & & & \\ \hline \multicolumn{4}{|l|}{ Formulas: } \\ \hline Changing Crodit Policy Anafyeir: & \begin{tabular}{l} Projecled income \\ Statement Under \\ Cument Credi Policy \end{tabular} & \begin{tabular}{c} Effect of \\ Credit Policy \\ Chonge \\ \end{tabular} & \begin{tabular}{l} Projeced Income \\ Statement Under Now \\ Credit Policy \end{tabular} \\ \hline Gross saies. & =813 & =F21821 & =817 \\ \hline Discounts & cos5 & =F22822 & es8s5 \\ \hline Nel sales & SNIA & Sinia & NN/A \\ \hline Varlabie costs & svid. & rovis. & WN/A \\ \hline Profit belore ondit costh and texes & inia & TINIA & WNIA \\ \hline \multicolumn{4}{|l|}{\begin{tabular}{l} Crodil-relaled costa: \\ Cont of carring recelintios \end{tabular}} \\ \hline Cont of carrying roceivabies & ANis. & r mia & \\ \hline Bad dobt loses & asess. & & \\ \hline Profir befoce taxes & FNiA & Fin & HNA \\ \hline Taves. & & rinis. & AN/A \\ \hline Net inceme & & min & inia \\ \hline Should the change in credi terms be made? & WNA & & \\ \hline & & & \\ \hline \end{tabular}