Shortening the credit period A firm is contemplating shortening its credit period from 45 to 35 days and believes that, as a result of this change. its average collection period will decline from 49 to 42 days. Bad-debt expenses are expected to decrease from 1.4% to 0.9% of sales. The firm is currently selling 11,800 units but believes that as a result of the proposed change, sales will decline to 9,900 units. The sale price per unit is $54, and the variable cost per unit is $45. 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 $ (Round to the nearest dollar. Enter as a negative number.) (Round to the nearest dollar.) The benefit from the reduced marginal investment in A/R is $ The cost savings from the reduction 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.)