Telluride Company sells $25 million of its products to wholesalers on terms of "net 30." Currently, the firm's average collection period is 53 days. To speed up the collection of receivables, Warren is considering offering a cash discount of 3% if customers pay their bills within 10 days. The firm expects 47% of its customers to take the discount and its average collection period to decline to 41 days. The firm's required pretax return (i.e., opportunity cost) on receivables investment is 17%. Determine the net effect on Warren's pretax profits of offering a 3% cash discount.

Multiple choice:

a.-$323,996

b.$156,337

c.-$256,745

d.-$212,774