P14-11 (similar to) Question Help Initiating a cash discount Gardner Company currently makes all sales on credit and offers no cash discount. The firm is considering offering a 2% cash discount for payment within 15 days. The firm's current average collection period is 60 days, sales are 40,000 units, selling price is $45 per unit, and variable cost per unit is $32. The firm expects that the change in credit terms will result in an increase in sales to 43,000 units, that 70 % of the sales will take the discount, and that the average collection period will fall to 30 days. If the firm's required rate of retun on equal-risk investmonts is 10 % , should the proposed discount be offered? (Note: Assume a 365-day year.) The additional profit contribution from additional sales is $ 39,000. (Round to the nearest dollar) The amount of cost that will be saved due to the reduction in average A/R is $ (Round to the nearest dollar) t Libra 300-0ay year) signments The addtional proft contribution from additional sales is $ 40,000 (Round to the nearest dollar) udy Plan The amount of c0st that will be saved due to the reduction in average NR is $ 10,060 (Round to the nearest dollar) The cost of extending the cash discount to customer is $ 40,635 esults (Round to the nearest dollar) The net profit from the proposed cash discount is $ 9,434 (Round to the nearest dollar) earson eText Should the proposed cash discount be offered? (Select the best answer below) Multimedia Libra X No inancial Calcula * Yes Chapter Resourci Question is complete. Tap on the red indicators to see incorrect answers. All parts showinn am