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Shortening the credit period Atem is correlating to its credit pened to 40 to 30 day and beleves that, as a result of this change.

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Shortening the credit period Atem is correlating to its credit pened to 40 to 30 day and beleves that, as a result of this change. Its average collection period wil decine from 45 to 38 days. Bad debt penses are expected to decrease from 1.7100 of sales. The firm is currently selling 12.000 units but believes that as a mult of the proposed change wil decline to 9,000 unit. The sale priceperunt $56, and the vanate colpe unit is 547. The firm has a required return on equal risk investments of 12.5%. Evaluate is decision and make a recommendation to the form (Note: Assume a 385-cay yet The additional profit contribution from an increase in sales is $ 11200. (Round to the nearest dollar.) The cost from the increased marginal investment in A/R is $ 2,897' (Round to the nearest dollar.) The cost from the increase in bad debts is $ 10,906) (Round to the nearest dollar) The net profit or loss from implementing the proposed plan is $ -2,603". (Round to the nearest dollar. Enter a negative number for a loss.) Is the proposed plan recommended? No (Select from the drop-down menu.)

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