Score. W P15-12 (similar to) Shortening the credit period A firm is contemplating shortening its credit period from 40 to 30 days and believes that, as a result of this change, its average collection period will decline from 46 to 35 days. Bad-debt expenses are expected to decrease from 14% to 1.1% of sales. The firm is currently selling 12,500 units but believes that as a result of the proposed change, sales will decline to 10,400 units. The sale price per unit is $58, and the variable cost per unit is $46. The firm has a required return on equal-risk investments of 12.1% Evaluate this decision, and make a recommendation to the firm (Note Assume a 365 day year) The reduction in profit contribution from a decline in sales is $ 25200 (Round to the nearest dollar Enter as a negative number) The benefit from the reduced marginal investment in A/R is $ 3,218" (Round to the nearest dollar) The cost savings from the reduction in bad debts is $ 3,515 (Round to the nearest dollar.) The net profit or loss from implementing the proposed plan is $ - 18,467" (Round to the nearest dollar. Enter a negative number for a loss) Is the proposed plan recommended? No (Select from the drop-down menu.) Question is complete. Tap on the red indicators to see incorrect answers. All parts showing Similar Question Type here to search O 0