Question 2 5 pts Jane Edwards, the new credit manager of the Acme Corporation, was alarmed to find that Acme sells on credit terms of net 90 days while industry-wide credit terms were net 30 days. On annual credit sales of $45.45 million, Acme currently averages 94 days of sales in accounts receivable. Edwards estimates that tightening the credit terms to net 30 days would reduce annual sales by $2 million, but accounts receivable would drop to 45 days of sales and the savings on investment in them should more than overcome any loss in profit. Acme's variable cost ratio is 70% and taxes are 25%. If the interest rate on funds invested in receivables is 10%, should the change in credit terms be made? Yes, profits grow by $4,796 No, profits fall by $24,745 No, profits fall by $116,726 Yes, profits grow by $92,875 Question 2 5 pts Jane Edwards, the new credit manager of the Acme Corporation, was alarmed to find that Acme sells on credit terms of net 90 days while industry-wide credit terms were net 30 days. On annual credit sales of $45.45 million, Acme currently averages 94 days of sales in accounts receivable. Edwards estimates that tightening the credit terms to net 30 days would reduce annual sales by $2 million, but accounts receivable would drop to 45 days of sales and the savings on investment in them should more than overcome any loss in profit. Acme's variable cost ratio is 70% and taxes are 25%. If the interest rate on funds invested in receivables is 10%, should the change in credit terms be made? Yes, profits grow by $4,796 No, profits fall by $24,745 No, profits fall by $116,726 Yes, profits grow by $92,875