Relaxation of credit standards Lewis Enterprises is considering relaxing its credit standards to increase its currently sagging sales. As a result of the proposed relaxation, sales are expected to increase by 20% from 10,000 to 12,000 units during the coming year, the average collection period is expected to increase from 35 to 55 days; and bad debts are expected to increase from 1.5% to 3.5% of sales. The sale price per unit is $41, and the variable cost per unit is $29. The firm's required return on equal-risk investments is 9.9%. Evaluate the proposed relaxation, and make a recommendation to the firm. (Note: Assume a 365-day year.) The additional profit contribution from an increase in sales is $ (Round to the nearest dollar.) The cost from the increased marginal investment in A/R is $ (Round to the nearest dollar.) The cost from the increase in bad debts is (Round to the nearest dollar.) The net profit or loss from implementing the proposed plan is $. (Round to the nearest dollar. Enter a negative number for a loss.) Is the proposed plan recommended? (Select from the drop-down menu.)