Pipers Signs wants to improve its collections of accounts receivable.They are considering changing their credit policy from net 30 to 2/10 net 30.If they make this change, they assume the following will occur:

90% of customers will take advantage of the new discount

Overall sales will increase from $2,000,000 to $2,200,000

Overall profit margin will stay constant at 25% of sales

1% of sales will become bad debt.Currently they have no bad debts.

Pipers can earn 18% on any funds freed up by the change.

Should the company adopt the policy? Support your answer by calculating the net change.