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Usahasama Company is considering to offer 3 percent cash discount to their customers who pay within 15 days. Currently, on average it takes 50 days

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Usahasama Company is considering to offer 3 percent cash discount to their customers who pay within 15 days. Currently, on average it takes 50 days for company to collect payment from the customers. The current sales is 90,000 units with the selling price and variable cost per unit of RM40 and RM30 respectively. The company expects that by changing the credit terms, the sales will increase to 100,000 units, in which 50 percent shall be taking the cash discount. The average collection period is expected to decline to 35 days. If the required rate of return on investment with equivalent risk is 15 percent, should Usahasama Company give cash discount? (Assuming there are 365 days in a year) i) Calculate the cost of cash discount

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