Shortening the credit periodA firm is contemplating shortening its credit period from 35 to 25 days and believes that, as a result of this change, its average collection period will decline from 42 to 31 days. Bad-debt expenses are expected to decrease from 1.5% to 1.1 % of sales. The firm is currently selling 11,800 units but believes that as a result of the proposed change, sales will decline to 9,800 units. The sale price per unit is $55, and the variable cost per unit is $43.

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.)