Question 10  We have the following information:  Current sales: $400,000/year  Average time for collection of accounts receivable: 60 days  Bad debts: 7% of sales  Variable costs: 75% of sales  Cost of funds invested in client accounts: 10%  Annual administration and collection costs: $5,000 The company is considering the possibility of introducing more restrictive collection procedures which, it is estimated, would have the effect of increasing sales to $375,000 per year, the average customer collection period to 45 days, bad debt at 3% of sales and annual administration and collection costs at $15,000. Should the company change its current collection procedures?