RM Company currently makes all sales on credit and offers no cash discount. The firm is

considering offering a 2% cash discount for payment within 15 days. The firms current average

collection period is 60 days, sales are 40,000 units, selling price is P45 per unit, and variable cost

per unit is P36. The firm expects that the change in credit terms will result in an increase in

sales to 42,000 units, that 70% of the sales will take the discount, and that the average

collection period will fall to 30 days. The firms required rate of return on equal-risk investment

is 25%. (Use a 365-day year).