P15-12 (similar to) Shortening the credit period A firm is contemplating shortening its credit period from 35 to 25 days and believes that, as a result of this change, its average collection period will decline from 39 to 31 days. Bad-debt expenses are expected to decrease from 1.5% to 1.1% of sales. The firm is currently selling 11,900 units but believes that as a result of the proposed change, sales will decline to 9,800 units. The sale price per unit is $57, and the variable cost per unit is $45. The firm has a required return on equal-risk investments of 11.6%. Evaluate this decision, and make a recommendation to the firm. (Note: Assume a 365-day year.) The reduction in profit contribution from a decline in sales is $. (Round to the nearest dollar. Enter as a negative number) Enter your answer in the answer box and then click Check Answer. parts Check Answer Clear All