Yes, profits grow by $22,033 Question 2 7 pts Jane Edwards, the new credit manager of the Acme Corporation, was alarmed to find that Acme sells on credit terms of net 90 days while industry-wide credit terms were net 30 days. On annual credit sales of $25.45 million, Acme currently averages 98 days of sales in accounts receivable. Edwards estimates that tightening the credit terms to net 30 days would reduce annual sales by $1 million, but accounts receivable would drop to 40 days of sales and the savings on investment in them should more than overcome any loss in profit. Acme's variable cost ratio is 75% and taxes are 25%. If the interest rate on funds invested in receivables is 12%, should the change in credit terms be made? Yes, profits grow by $47,896 No, profits fall by $28,925 Yes, profits grow by $92.875 No, profits fall by $152,450 Question 3 5 pts Mako Industries is considering changes in its working capital policies to improve its cash flow cycle. Mako's sales last year were $5.0 million (all on credit), and its net profit margin was 6%. Its inventory turnover was 7.0 times during the year, and its DSO nobloc