Suppose that you are recently hired as credit manager of Turk Company and try to increase efficiency in credit policy. You found out that your company is selling on credit terms of net $50$ days whereas industry$-$wide credit terms have recently been lowered to net $30$ days. On annual credit sales of $$3$ million, Turk has ACP of $60$ days. You estimate that by tigthening credit terms, sales will drop to $$2\mathrm{.}6$ million, and company will have ACP of $35$ days, which will offset the drop in sales.

Variable cost ratio is $70\%,$ interest on funds used $11\%$ and tax rate is $40\%.$ Should the change in credit terms be made?