Southall Corporation is considering changing its payment date from "net 30" to "net 50" to help its financially weaker customers. The company forecasts that this change will increase the collection period from 40 days to 55 days (use a 360-day year), increase sales from $9,000,000 to $9,900,000, but also increase bad debts from 1% of sales to 1.25% of sales. Southall's variable costs are 75% of sales, its tax rate is 40%, and it has a 14% cost of capital.

Reference: Ref 12-11

What is the internal rate of return (IRR) of the proposal?

Group of answer choices

19.33%.

17.93%.

29.85%.

23.54%.