Question 3 (15) Pharmacy shops experienced a decline in sales after a controversial marketing strategy attracted negative publicity. The board of directors appointed an audit firm to investigate the root cause of the problem and to recommend business rescue strategy. In its recommendations the audit firm advised the board to employ a new credit policy, that will attract clients and boost sales revenue. Pharmacy management crafted the new credit policy with the following credit terms: The following are the current terms of the credit policy: I he business has a cost of capital of 12%. Required: Calculate the effect that the proposed policy will have on earnings before interest and tax (EBIT) and advise whether it will be better to switch to the new policy or remain with the current one. (Assume a 365-day year)