The Happy Hoppy Brewery sells craft beer to chain grocery stores on credit term of "net 20". Currently, the average collection period is 30 days and sales are $18 million a year. Happy Hoppy is considering changing its credit term to "net 40" to encourage more grocery chains to buy its beer. The firm estimates that increasing the credit period leads to the following: (1) average collection period will increase by 15 days, (2) sales will increase by 18%, (3) inventory will increase by $550,000, and (4) bad-debt loss will increase by $80,000. The Happy Hoppy has variable cost ratio of 0.65 and pretax required rate of return of 16%. Answer the following questions. a) What is the profit contribution of additional sales? (2 points b) What is the cost of additional investment in accounts receivable? [4 points] c) What is the cost of additional investment in inventory? [2 points] d) Is there a bad-debt loss? [1 point] e) Determine the net effect of this credit period extension on pretax profit of The Happy Hoppy Brewery and if it should implement the credit period extension. [3 points]